Answer: First, let us look at the complete third commandment that discusses taking God's name in vain. There are two main ways most Bible translations handle the seventh verse of Exodus 20.
You shall not take the name of the Lord your God in vain, for the Lord will not hold him guiltless . . . (Exodus 20:7, HBFV, which is similar to the KJV, NKJV and other translations)
You shall not misuse the name of the Lord your God, for the Lord will not hold anyone guiltless . . . (NIV, which is similar to the HCSB, CEV, NLT and other translations)
The spiritual intent of this commandment is repeated in the New Testament in Jesus' model prayer.
Therefore, you are to pray after this manner: 'Our Father Who is in heaven (reiterating the first commandment of who is the ONLY true Deity worthy of worship), hallowed be Your name (Matthew 6:9, HBFV).
Violations of commandment
An obvious, standard way this commandment is violated is to refer to God unnecessarily, or misusing a name that references him, such as when swearing and cursing. One of the subtle ways, however, this command can be broken is with euphemisms. A euphemism is a mild, seemingly harmless word or phrase used in place of a more direct or harsh term.
For example, the word "jeez," created in America during the 1920's (dictionary.com), is a euphemistic way of referring to Jesus. "Cripes," "jeepers," "criminy" and other words are also used as a reference to Christ. The words "Gosh," "Golly" and others, which many people (and even cartoons) use is a euphemistic way of referencing God.
The problem with these euphemisms of names is that they are directly tied to referencing the God of the universe who wrote the commandments with his finger (Exodus 31:18). The spirit of the law is that we should not reference, lightly or carelessly, the Eternal in our daily lives.
This is not to say all euphemisms are bad, as Scripture uses them from time to time. When the KJV Bible states that Adam "knew" his wife Eve and bore Cain (Genesis 4:1) it is clearly referring to them having sex. The phrases "slept with his fathers" (1Kings 11:21, 14:20, etc.) or "fallen asleep in Jesus" (1Thessalonians 4:14) both are euphemisms for those who died.
In the Sermon on the Mount, Jesus Himself went so far as to say people should not swear at all, which obviously includes all mentions of God or any of his names when swearing (Matthew 5:34 - 37). The Apostle Paul further expanded the principle concerning how Christians are to communicate when he told the Ephesian church the following.
Therefore, be imitators of God, as beloved children . . . But fornication and all uncleanness or covetousness, do not permit it even to be named among you, as is fitting for saints; Nor filthiness, nor foolish talking or jesting, which are not becoming; but instead, thanksgiving (Ephesians 5:1, 3 - 4, HBFV).
Why be strict?
Why is God so strict regarding when and how people refer to Him? It is because any reference to him represents His power, authority, and perfect character. He warns His people to not live a wrong way of life while invoking Him (Isaiah 48:1 - 2).
When believers violate His laws so routinely or in such a big way that it brings disrepute upon him, they are also causing the Third Commandment to be broken in spirit. They are encouraging others (i.e., unbelievers) to take God's name in vain because of their own bad behavior.
A striking Biblical example of causing God's reputation to be tarnished occurred after King David committed adultery with Bathsheba and had her husband killed in battle in order to come up his affair after she became pregnant. The prophet Nathan told him the following when confronting him regarding his sins.
". . . because by this deed you have given great occasion to the enemies of the Lord to blaspheme . . ." (2Samuel 12:14, HBFV).
Clearly, the spiritual intent of the Third Commandment forbids (but still includes) something greater than simply not using the words "God" or "Jesus" in profanity or in cursing someone or something. Taking God's name in vain means using references to the Father or our Savior with evil or deceptive intent. It means not giving them the proper and reverent use taught in the Bible.