Definition for otaku
: "
Fanatic". Slang word for hard-core fans of anything, roughly equating to "geek", "nerd", "fanboy", or "freak". Thus, a manga otaku is someone whose life revolves around manga to an extreme degree. The word usually has neutral connotations within fan culture, but it can sound highly negative in other contexts. In Japanese, the word "mania" means much the same as "otaku".
Literally, "o-taku" (J is formal speech for "your house", which is also a polite, somewhat distant, second-person way of saying "you". ) The word came to be applied to those fans or hobbyists who rarely got out and mingled with the rest of society.
(It is interesting to note that the English "fanatic" derives from the Latin "fanum", or temple/house - "fanatics" being a devoted worshipper.)
It has been speculated that the slang usage of "otaku" was coined by Shinda Mane, a manga artist active in the early '80s. Freelance writer Nakamori Akio popularised the term in an article for the June 1983 issue of Manga Burikko. The otaku entered public consciousness in 1989 with the arrest of serial killer Miyazaki Tsutomu, a dedicated anime/manga otaku.
The above information is taken from Usenet manga Glossary