I read last month(20th anniversary article) that they chose the name Etihad, as a translation of Unity. I'm guessing that's come from the UAE's PR since they first launched in 2003 because having checked recently, it looks like it's been on the wiki for some time too. There are multiple interpretations but since the source itself has provided their intended interpretation, there's no need to debate it or listen to any people trolling City fans on twitter (if that's what they are doing?).
edit: Oh I see others have beat me to it.
It's meant to represent the coming together of the 7 Emirates. The long term goal is to make Etihad recognised globally(since over there it already has been designated that title, so it kind of is) as the national flag carrier of the UAE, not just Abu Dhabi's airline. Makes you think about some of the western press' attitudes towards the sponsorship deals and the comments they make. You'd almost think it was some shell company set up in 2008, just to funnel money into City.