Origins
The word 'intelligence' defines understanding as an act of discrimination — the ability to pick out what matters from what does not. It entered English in the fourteenth century from Old French 'intelligence,' from Latin 'intelligentia' (understanding, discernment, knowledge, the capacity to perceive), from 'intelligere' or 'intellegere' (to understand, to perceive, to discern), formed from 'inter-' (between, among) + 'legere' (to choose, to pick out, to gather, to read).
The etymological image is of someone standing among scattered objects and choosing the right ones — selecting the relevant from the irrelevant, the signal from the noise. This metaphor has proven remarkably durable: modern discussions of artificial intelligence, cognitive science, and information theory continue to define intelligence as the ability to extract meaningful patterns from complex environments, to choose the appropriate response from a vast space of possibilities.
Latin 'legere' is one of the most productive roots in the Latin-to-English pipeline. From PIE *leǵ- (to gather, to collect), it produced an enormous family. With prefixes: 'elect' (to choose out, e- + legere), 'select' (to choose apart, se- + legere), 'collect' (to gather together, com- + legere), 'neglect' (to not pick up, nec- + legere), 'diligent' (choosing carefully, dis- + legere). Without prefixes: 'lecture' (a reading), 'lesson' (a reading, from Latin lectiō), 'legend' (a thing to be read), 'legible' (able to be read). Through Greek cognate 'légein' (to gather, to speak): 'logic,' 'logos,' 'dialogue,' and every '-logy' word. The range from 'gathering firewood' to 'understanding the cosmos' is all one root.
Latin Roots
The related noun 'intellect' (from Latin 'intellectus,' understanding, perception) comes from the same verb. Medieval philosophy distinguished 'intellectus' (direct intuitive grasp of truth) from 'ratio' (step-by-step discursive reasoning), a distinction that maps imperfectly onto the modern English pair 'intellect' and 'reason.' Aquinas, following Aristotle, treated the 'intellectus' as the highest human faculty — the power by which we grasp first principles without needing to reason our way to them.
The espionage sense of 'intelligence' — gathered information about enemies, as in 'intelligence agency' or 'military intelligence' — emerged in the sixteenth century and preserves a different facet of the Latin original. 'Intelligentia' could mean 'information, news, notification' as well as 'understanding.' An intelligence agent gathers (legere) information from between (inter-) hostile parties. The CIA's full name (Central Intelligence Agency) uses the word in this older, information-gathering sense.
The modern compound 'artificial intelligence' (coined by John McCarthy in 1956) yokes together two Latin-derived words: 'artificial' (made by art/skill, from ars + facere) and 'intelligence' (the capacity to choose between, to understand). The term implicitly claims that the machine's pattern-recognition and decision-making replicate — or at least simulate — the human faculty of 'choosing between' that 'intelligere' originally described.