What's the origin of the word "sprite"?

Solution 1:

" The term "sprite", a Greek fairy, was coined by one of the definers of the Texas Instruments 9918(A) video display processor (VDP)"

See wikipedia for further information.

Solution 2:

I guess the reason to use the term "sprite" (ghost) for these graphics is that in general the graphic will be (partially) transparent and it will not disturb the background when being moved.

Both features were quite new at the time.

Solution 3:

"Sprite" has connotations of brightness and quick movement, which I guess were apposite for the namers.

But to some degree, the answer is "because they needed a word and that one was available".