The word 'witch' comes from Old English wiccian, 'to practice magic', hence wicce 'a woman who practices witchcraft'. The Easterlings who gave Morwen this title did so not because they thought that she was literally a witch, but because of her association with the Elves, who they saw as a dangerous magical beings (this same sense of eldritch magic would also later appear in the Mannish names like 'Witch-king' or 'Witch-realm').

The element 'wife' here probably relates to the broader Old English sense of wif as simply a 'woman' (though doubtless influenced by the fact that Morwen was the wife of Húrin, who had been a close ally of the Elves).

In combination, then, the name of 'Witchwife' would means something like 'woman who consorts with strange powers'. As old Sador said, when Túrin encountered him on his return to Dor-lómin, 'Witchwife' was equivalent to 'Elf-friend' in the twisted language of the invading Easterlings.