The winner of the organization's Word of the Year contest was picked by an expert jury that sifted through roughly 3,000 proposals, according to GfdS.
European officials use Stresstest to refer to tests of the financial strength of banks.
But German rail operator Deutsche Bahn also performed a stress test on the controversial Stuttgart 21 rail infrastructure project, and in the wake of the Fukushima nuclear catastrophe in Japan, German officials used the word to refer to tests they did on the Germany's nuclear facilities.
Its selection received immediate plaudits from one of the year's big newsmakers, Stuttgart 21 arbitrator Heiner Geißler, who called it a “very good” choice.
Second place was taken by another word with connections to the European financial crisis, hebeln,, which means "to leverage." That term is used to refer to efforts to increase the size of the European rescue fund while avoiding pouring in more capital.
Meanwhile, the third place word was Arabellion, referring to the pro-democracy rebellions which have swept the Arab world this year.
Fourth place was taken by another word related to the European financial crisis. The term Merkozy, which refers to the tight partnership between German and French leaders Angela Merkel and Nicolas Sarkozy in tackling the eurozone debt crisis.
Rounding out the top five was Fukushima, which not only refers to the nuclear disaster that befell Japan following an earthquake and tsunami earlier this year, but can also be used to describe the consequences of nuclear catastrophe in general.
Previous words of the year include Wutbürger (enraged citizen) in protest-filled 2010, Abwrackprämie (wreck premium), which was coined in 2009 to refer to a government premium for scrapping old cars and buying new ones, and Finanzkrise (financial crisis) in 2008.