Gay was slang, at least in the 20th and 21st centuries on Earth, for homosexuality. (TV: Let's Kill Hitler) It was, in some ways, synonymous with queer. (PROSE: Damaged Goods, Beyond the Sun) In this sense, it was not necessarily a pejorative, but merely a statement of sexual orientation. Other cases, however, may present it as a word also expressive of feelings of merriment.
However, it was also used as a clear insult, meaning "weak" or "ridiculous". Rose Tyler, for instance, once claimed that the Ninth Doctor was "so gay" for complaining about the pain of being slapped in the face by her mother Jackie Tyler. (TV: Aliens of London)
While reading an edition of Heat, the Ninth Doctor read an article about a celebrity couple. He remarked that it wouldn't last, since "he's gay and she's an alien." (TV: Rose)
Raoul often spent Saturday nights in Peterborough, going into gay clubs and pubs, looking for people who would be willing to be part of the audience for Glamorama. (PROSE: Hospitality)
Whilst talking to Lorna Bucket the Fat One said "We're the thin fat gay married Anglican marines, why would we need names as well?" Referring to himself and his husband, the Thin One. (TV: A Good Man Goes to War)