Is okay a word and what does it mean?

Answer 1

They are several origins given to OK.

One of the most famous is during the american civil war, when there was no casualties, the daily report would say 0K as Zero Killed.

Another origin that can be read is that one of the first Quality Control experts, Otto Kreuger used to stamp is initials on all parts he had passed.

Some other explainations can be found over the web, but the first one above is more likely to be the correct one.

Answer 2

OK is a word. The informal word is also spelled O.K. and okay. All three forms can be found in many standard dictionaries. The word's use, for all three spellings, are listed in The American Heritage Dictionary as a noun, verb, and as an interjection.

In "OK" and "O.K." both letters are capitalized, yet the word is not identified by the given lexicon as an abbreviation. This makes the spellings unusual, yet not uniquely so.