"tiny animal, minute arachnid," Old English mite "minute, parasitic insect or arachnid," from Proto-Germanic *miton (source also of Middle Dutch mite, Dutch mijt, Old High German miza, Danish mide) meaning originally perhaps "the cutter," in reference to its bite, from Proto-Germanic *mait- (source also of Gothic maitan, Old High German meizen "to cut"), from PIE root *mai- (1) "to cut" (see maim). Compare ant. Or else its original sense is "something small," and it is from PIE root *mei- (2) "small," in reference to size.
Also the name of a medieval Flemish copper coin of very small value, proverbial in English for "a very small unit of money," hence used since Wyclif to translate Latin minutum (Vulgate) in Mark xii.42, itself a translation of Greek lepton. French mite (14c.) is a loan-word from Dutch.