Originary, the Japanese word Otaku (お宅) means "your family/house".
This is an indirect expression of the word "YOU".
For example, let's say "What do you eat in the morning?" in Japanese.
We say "お宅では朝は何を召し上がりますか？(Otaku dewa asa wa nani wo meshiagari masuka?)" that means "What is eaten in your house" or somethig like that.
Japanese are shy so they don't point out fingers to the person who you are talking to.
So they speak "your house" to mean "you".

Typically, OTAKU (nerd) is the guys as follows:

* likely to watch children's TV show (anime, tokusatsu(SFX), etc.) even if he is adult
* likely to use computers over 12 hours a day
* love train
* love "idol" (young girl pop singer like AKB48 etc.)
* interchange information with internet
* publish their own thin magazine and sell / buy it in the convention
* love pizza and coke
* wear check shirts

and so on.

Note that I don't mean all OTAKUs don't have all the features. Some ANIME OTAKU don't like idol, while some IDOL OTAKU don't like ANIME.

I think there are three big parties of OTAKU.

* ANIME OTAKU
* IDOL OTAKU
* TETSUDOU OTAKU (which means train maniac)

The OTAKUs interchange information very actively.
They don't only write/read internet BBS, but also meet face to face, in the big conventions.

For the first time, they don't know each other's name.
So they call each other "OTAKU".
This is the origin of the word, I heard.
(Not so sure though!)