Theravada
In the Theravada tradition, and in early PTS publications, the word arahant or arhat is interpreted to mean the "worthy one" This interpretation is based on the assumption that the root of the word is Pali araha (cf. Sk. arha).
According to Bikkhu Bodhi
The word is derived from a verb arahati, meaning "to be worthy," and thus means a person who is truly worthy of veneration and offerings. Among Indian spiritual seekers in the Buddha's time, the word was used to denote a person who had attained the ultimate goal, for this is what made one worthy of veneration and offerings.The interpretation "worthy one" has been challenged by more recent research, resulting from the etymological comparison of Pali and early Jain Prakrit forms (arihanta and arahanta). The alternative etymology is "foe-destroyer" or "vanquisher of enemies," which corresponds to the Jain definition. Richard Gombrich has proposed an etymology of ari + hanta, bringing the root meaning closer to Jina (an epithet commonly used of both the leaders of the Jain religion and Buddha).
Read more about this topic: Arhat (Buddhism), Etymology