The term "Piano," in reference to the current 88-key instrument we know today, originated shortly after its invention. Prior to the 18th century, the popular keyboard instruments were the Clavichord and the Harpsichord, both of which functioned on hard hammers and strumming mechanisms to produce sound. However, these mechanisms limited dynamic range greatly, so dynamic expression was cut down to one or two levels.
In ca. 1698-1700, Bartolomeo Cristofori, under the employment of the famous Medici family of Italy, designed what would be the basis for the modern piano. By replacing the plucking action with a padded and weighted hammer, Cristofori was able to offer greater expression and dynamic range through his new instrument. Musicians could play both soft and loud with this invention, leading to Cristofori's coining of Fortepiano for its name (Italian for "Loud Soft"). Today, we've shortened the term to Piano, indicating its ability to play softer dynamics instead of the steady, loud sound of Harpsichords.