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BMW stands for "Bayerische Motoren Werke," which is German for "Bavarian Motor Works."
Breaking down the name:
A bit of history: The company began in 1916 as an aircraft engine manufacturer and took the BMW name in 1917. It moved into motorcycles in the 1920s and automobiles in 1928, growing into the luxury car and motorcycle maker known worldwide today.
About the logo — a popular myth: Many people believe the blue-and-white circular logo represents a spinning airplane propeller against a blue sky, a nod to the company's aviation roots. It's a charming story, but BMW itself has clarified that this isn't the original meaning.
The roundel's blue and white quadrants actually come from the colors of the Bavarian flag — the state where BMW was founded. (The colors were arranged in reverse order because trademark law at the time prohibited using state coats of arms directly in commercial logos.) The propeller association came later, popularized by a 1929 BMW advertisement.
In short: BMW = Bayerische Motoren Werke = Bavarian Motor Works, and its logo reflects the Bavarian flag rather than a propeller.