The literal meaning of the Latin word is "that which is spoken," as it is the passive participle of the verb for, fari which means "to speak." The idea is that fatum is something spoken by the gods, an oracle or prediction with prophetic powers.
In particular, fatum could refer to an ill fate, an inevitable disaster or calamity, or death itself. In English, the word "fatal" (from the Latin adjective fatalis, "decreed by fate"), came to have the narrow meaning of causing death.
Of course, there is also a good sense of fate, too, which is where the name Boniface comes from, Bonifatius in Latin.
Sometimes fatum was personified in divine form as the Fates, Latin Fata (neuter plural). It is this Latin usage which ultimately gave rise to the English word "fairy" via the Old French rendering of the Latin fata as fae.
Here are some examples of today's word in Latin sayings and proverbs; for more information, see the page at the Scala Sapientiae, which contains notes on some of the proverbs cited below, as well as additional proverbs:
Agunt opus suum fata.
Fata viam invenient.
Omnia fato fiunt.
Sic erat in fatis.
Sua quemque sequuntur fata.
Ratio fatum vincere nulla valet.
Multi ad fatum venere suum, dum fata timent.
Curae cedit fatum.
Fatis agimur; cedite fatis.
Ducunt volentem fata, nolentem trahunt.
Ut fata trahunt.
Fata non servant ordinem inter senes et iuvenes.
Diverso tempore, diversa fata.
Fata regunt homines.
Regitur fatis mortale genus.
Mutari fata non possunt.
Iam Troiae sic fata ferebant.
Audacem iuvant fata.
Omnia fato eveniunt.
Habent et sua fata libelli.