"body of water surrounded by land and filling a depression or basin," early 12c., from Old French lack (12c., Modern French lac) and directly from Latin lacus "pond, pool, lake," also "basin, tank, reservoir" (related to lacuna "hole, pit"), from PIE *laku- "body of water, lake, sea" (source also of Greek lakkos "pit, tank, pond," Old Church Slavonic loky "pool, puddle, cistern," Old Irish loch "lake, pond"). The common notion is "basin."
There was a Germanic form of the PIE root which yielded Old Norse lögr "sea flood, water," Old English lacu "stream, pool, pond," lagu "sea flood, water, extent of the sea," leccan "to moisten" (see leak (v.)). In Middle English, lake, as a descendant of the Old English word, also could mean "stream; river gully; ditch; marsh; grave; pit of hell," and this might have influenced the form of the borrowed word.
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."
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Definitions of lough from WordNet
a long narrow (nearly landlocked) cove in Ireland;