The name ‘Fatah’ is derived from the initials of the Arabic name, Harakat Tahrir Filistin (Palestine Liberation Movement) in reverse. Fatah means “conquest” in Arabic.
The group was founded by Yasser Arafat and a handful of close comrades in the late 1950s  to promote the armed struggle to liberate all Palestine from Israeli control. 
Fatah was once the cornerstone of the Palestinian national cause and the undisputed ruling faction of the Palestinian Authority.
The movement has fallen from its position of dominance since the death of Yasser Arafat in 2004, and in 2006 lost parliamentary elections to the militant Hamas group.
In June 2007 it was effectively driven out of the Gaza Strip after violent clashes with Hamas.
Under Arafat’s leadership, Fatah evolved from a resistance group into the dominant faction of the Palestine Liberation Organisation (PLO).
Now led by another of its founders, Palestinian Authority President Mahmoud Abbas, Fatah has seen its power steadily eroded by internal division and rival political groups.
The secular nationalist party has been dogged by claims of nepotism and corruption in government and critics say it is in desperate need of reform.– Source: Profile: Fatah Palestinian movement, BBC, Aug. 4, 2009. Last accessed: Monday, March 14, 2011 – 8:39 AM CET
Fatah has maintained a number of militant groups since its founding. Its mainstream military branch is al-Assifa. Fatah is generally considered to have had a strong involvement in terrorism in the past, though unlike its rival Islamist faction Hamas, Fatah is no longer regarded as a terrorist organization by any government. Fatah used to be designated terrorist under Israeli law and was considered terrorist by the United States Department of State and United States Congress until it renounced terrorism in 1988.
– Source: Fatah, Wikipedia. Last acessed: Monday, March 14, 2011 – 8:51 AM CET
However, the same Wikipedia entry also notes that “Fatah has since its inception created, led or sponsored a number of armed groups and militias, some of which have had an official standing as the movement’s armed wing, and some of which have not been publicly or even internally recognized as such.”
Several of these groups, including al-Aqsa Martyrs Brigades, have engaged in acts of terrorism.