When found in a text, you need to make sure it is a noun, for this expression. Otherwise, it could be just the past tense of the verb “lavar” (e.g. a camisa foi lavada).
As a noun, lavada means a win by a very large or humiliating score. It could be used if a team like Germany beats Brazil for a humiliating score. In that case, that would have been a lavada.
It is normally used with team sports, like soccer, or volley ball. It would be strange if someone used in a Judo fight to say that a fighter won against the other by a lavada. It wouldn’t sound natural.
However, it may be used as a figure of speech in another context, such as a business project that was delivered well beyond everyone’s expectation. You could say that it was a lavada, although there are probably better expressions, and it could sound strange depending on the context and audience.