late 14c., from Gaelic loch "lake, lake-like body," including the narrow, nearly land-locked arms of the sea found in the glacier-scoured landscape of west Scotland; cognate with Old Irish loch "body of water, lake," Breton lagen, Anglo-Irish lough, Latin lacus (see lake (n.1)). "The word was adopted in ONorthumbrian as luh" [OED]. The diminutive form is lochan.
The phrase Loch Ness monster is attested by 1934, the thing itself under slightly different names from 1933. The loch is named for the river Ness that flows out of it at Inverness; the river name is probably from an Old Celtic word meaning "roaring one."