What does "TTY" stand for?

Early user terminals connected to computers were electromechanical teleprinters or teletypewriters (TeleTYpewriter, TTY), and since then TTY has continued to be used as the name for the text-only console although now this text-only console is a virtual console not a physical console.

There are 6 virtual consoles in Ubuntu accessed by the keyboard shortcuts Ctrl+Alt+F1 to Ctrl+Alt+F6. You can move away from a virtual console (move the console to the background) by using the keyboard shortcut Ctrl+Alt+F7.

In Ubuntu 17.10 the login screen now uses virtual terminal 1. In Ubuntu 17.10 and later press Ctrl+Alt+F3 up to Ctrl+Alt+F6 for accessing a virtual console and press Ctrl+Alt+F2 to go back to the desktop environment.

^{Ubuntu 18.04 virtual console}

This is a teletype writer:

Pressing a key sends a character down the serial link. Incoming characters on the serial link are printed on the printer. So when you type ls, you get a hardcopy of the file listing.

(from http://www.cl.cam.ac.uk/~djg11/howcomputerswork/)

Yes, the origin of TTY in Unix is from teletypewriter. The tele in telephone, teletypewriter, etc comes from a Greek root meaning far or distant. tele + phon (sound) = Speaking at a distance and so on.

Timeshare systems (pre-Unix) developed physical terminals that allowed you to interact with (share) the computer during your scheduled time. These terminals meant you did not have to be physically in front of the computer to use it. You could also send output to a teletypewriter, that would print the output at that location.

This was the existing physical infrastructure when Unix was developed, so it was natural to use it for Unix networking. Emulation in virtual or software terminals of the features in physical terminals prevented older code or network infrastructure from breaking.

It's this origin in physical terminals (and ultimately the machines origins in the telgraph (distant writing) system and their use of control codes that accounts for certain terminal standards today. These include the standard 80 character width and the carriage return and linefeed codes.

The first printing telegraph machine was patented in 1846. Various companies continued developing them, and the word "Teletype" was first trademarked in 1921. One of these companies changed its name to the Teletype Corporation in 1928 and was acquired by AT&T in 1930. (Source: en.wikipedia.org/wiki/Teleprinter)

So these machines had seen almost 100 years of development before the first computers, and were the obvious choice for a human-interface device. There were more expensive terminals, but Teletypes were usually the cheapest and most reliable choices. AT&T/Bell Labs owned Teletype corporation when Unix was first developed, and the Digital Equipment computers it was developed on included Teletype 33ASR terminals as standard equipment. TTY was the device name for terminals on the PDP-7 and PDP-11 that Unix originated on, it probably went back to the PDP-1 and who knows what before that. So when they started working on a terminal device handler for Unix, why would they use anything else?

I was confused when I first learned that MSDOS used COM: as the device name for serial ports. I thought TTY was handed down from the ancients, this is heresy!

In the later days of the teletypes, it was adopted by the deaf community as a form of communications. Officially called TDD (Telephone Device for the Deaf) with the development & refinement of equipment that used the same communication media of Baudot and Ascii, it was widely adopted by the deaf to sign "TTY" because it's easier to sign than than "TDD". Nowdays, it's fast becoming ancient as deaf people use video relays to communicate. TTY/TDD's are mainly found in public settings at airports, government agencies, public venues, etc. that are hardly used due to the proliferation of wireless devices.

So, back in the day. Computers where hooked up via serial connection to the Teletype you mention. They were essentially matrix printers. You can look on youtube and see how they work. To maintain legacy code, each terminal or UI window you have gets liked to a tty device under /dev.

Nothing but semantics.