First of, a functor $F : \mathscr C → \mathrm{Set}$ is called representable (by $C$) if it's isomorphic (not necessarily equal) to $\mathrm{Hom}(C, -)$ for an object $C$ of $\mathscr C$. As for the term, an abstract functor $F$ is represented by the very concrete action of $\mathrm{Hom}(C, -)$.
Take for example the functor $L : \mathrm{Top} → \mathrm{Set}$ sending a topological space $X$ to the set of all loops in $X$. A loop is just a continuous function $S^1 → X$, so we have that $LX ≅ \mathrm{Hom}(S^1, X)$.
In fact, it kind of makes sense to say that a loop is an $S^1$-shaped element of $X$, right? This really generalizes the classical elements of $X$, since those correspond to functions $* → X$, where $*$ is the one-point space.
Note in particular that every continuous function $f : X → Y$ extends to these generalized elements: if $l : S^1 → X$ is a loop, then it's image in $Y$ is exactly $f∘l = \mathrm{Hom}(S^1, f)(l)$.
Now compare: we have no idea how an arbitrary functor $F: \mathrm{Top} → \mathrm{Set}$ might act. But if $F$ is representable and $F ≅ \mathrm{Hom}(C, -)$, then we know that $FX$ are just $C$-shaped elements of $X$, and that $Ff$ simply maps the $C$-elements of $X$ to $C$-elements of $Y$ in the most obvious way. So you represented something possibly completely abstract with a very simple idea.
For contravariant functors, a somewhat higer-level perspective would be that the Yoneda embedding $C ↦ \mathrm{Hom}(-, C)$ embeds $\mathscr C$ into the functor category $[\mathscr C^\mathrm{op}, \mathrm{Set}]$. Looking at it that way, you could say that a representable contravariant functor $F$ literally is (isomorphic to) the element of $\mathscr C$ it's represented by.
Disclaimer: this is why the term seems very sensible and apt to me, I don't know why it was chosen by the one who named it. For what is worth, I can't find anything in the Mac Lane's book, which sometimes has these kinds of historical comments.
