There is much speculation flying around as to what the word "Aiki" may mean. The ideas that seem to pop up the most are:
A) Aiki, is a term that is describing a way to understand, lead, manipulate or physically blend with the mind and intentions of an attacker.
B) A body ability that gives it's practitioner great physical power, making them seem unmovable and strangely forceful.
I found an interesting passage in Shiro Omiya's book "the hidden roots of Aikido-Aiki Jujutsu Daitoryu, secret techniques of an ancient martial art".
Shiro Omiya wrote:
Aiki, the art of negating an opponent's strength, can be demonstrated in many different ways, with varying degrees of accuracy. However, total understanding of all it's subtle dimensions is rare, since aiki has complex spiritual, physiological and physical dimensions.
The spiritual dimension of aiki involves a number of factors: power of suggestion, psychology, and susceptibility, For example, it may be possible to execute a technique in a certain dojo because it's practitioners are accustomed to that kind of training and are susceptible to the seeming effects of that technique- a kind of mass hypnosis. At another dojo the same technique may be completely ineffective. It is undeniable that some people are more suggestible than others, and a charismatic instructor good at reading that sensitivity can perform feats that appear amazing, such as downing an attacker without touching the person, or remaining immobile even with several people shoving him. The relationship between the power of suggestion and true mental power in aiki is very complex, and it is not easy to differentiate between the two.
From this, it would sound like a Daito ryu expert feels as if "Aiki" has a lot to do with the ability to lead someones mind.