Understand \uhn-der-STAND\ verb;
The origin of understand is Old English understandan. It meant "comprehend, grasp the idea of," but was probably literally "stand in the midst of" from under + standan ("stand"). In this context, under doesn't mean "beneath" like it usually would. This under likely comes from Old English under from Proto-Indo-European *nter- ("between, among").
However, that interpretation is up for debate. Some say that the prefix under and the preposition under are the same word with different meanings. As a prefix the word seems to have been lost in time, but similar Old English forms carried the same sense of "among" rather than "beneath." Expressions like under these circumstances carry that sense into Modern English.
Other interpretations are that the sense is really "be close to" like Greek epistamai (literally "I stand upon," actually "I know how, I know") or "stand before" like German verstehen ("understand").