Wordorigins.org

The name Montana was suggested by Rep. James Ashley of Ohio in the 1864 act that separated the Montana Territory from the Idaho Territory. The name means mountain or mountainous, but the proximate language of origin is not certain. Ashley could have created then name from the Latin montana, meaning mountainous region. Or he could have taken it from the Spanish montaña, meaning mountain.

(Sources: Oxford English Dictionary, 3rd Edition; Illustrated Dictionary of Place Names; Webster’s Third New International Dictionary)