Wikipedia
The khawal (plural khawalat) was a traditional native Egyptian male dancer cross-dressed in feminine attire and was popular up until the late eighteenth and early nineteenth centuries.
As they impersonate women, their dances are exactly of the same description as those of the Ghawazee [female dancers] ... Their general appearance ... is more feminine than masculine: they suffer the hair of the head to grow long, and generally braid it, in the manner of women ... they imitate the women also in applying kohl and henna to their eyes and hands like women. In the streets, when not engaged in dancing, they often veil their faces; not from shame, but merely to affect the manners of women.
In response to the prohibition of women dancing in public, cross-dressing males took their place. The khawal were effeminate male transvestite dancers in Egypt that emulated the female ghawazi by dancing with castanet self accompaniment, their hands painted with henna, long hair dressed in braids, plucking facial hair, wearing make-up, and adopting the manners of women. They would distinguish themselves from real females by wearing a costume that was part male and part female. The khawal performed at various functions such as weddings, births, circumcisions, and festivals. They also performed for foreign visitors in the nineteenth century sometimes causing confusion among the spectators. The khawal were perceived as sexually available; their male audiences found their ambiguity seductive.
In modern Egyptian slang, the term is derogatory and refers to a passive homosexual.