Historically, a parlor is a living area in a home where homeowners receive and entertain guests. "Parlor room" is rarely used anymore to describe a residential space. Instead, a "parlor" more often refers to a cozy entertainment venue that features a certain atmosphere and activities.
A parlor room at a club refers to an area where patrons can sit down, relax and have conversations apart from the dancing or entertainment. Other common venues referred to as parlors are funeral parlors and beauty parlors, according to Dictionary.com. In each case, the term "parlor" refers to the fact that the business has a separate area to meet and host patrons.