According to some, Baphomet is a demon, worshipped in Theistic Satanism. This may now (since 1854) be the case, but it has not always been the meaning of the name, the origin of the word might quite surprice you.
The simple truth behind the name.
Baphomet is nothing more then a french misspelling of the name mohammad, the inventor of islam.(*) According to the "trails of the templars" Not so misterious now is it? Ofcourse this name would have gotten up many times during their trail, since Templars were the arch enemies of islam. Ofcourse it was the intend of the inquisition to link the Templars with idolatry and pagan worship. Claiming that their association with pagan mohamedans in the holyland had corrupted their holy faith in Jesvs Christ the Son of God. This was important in tying the knot in the process against them, and "proving" that the templars had become infidels, heretics and practiced idolatry like the mohamedans.
We understand that the human mind likes and seeks mysteries, but most of the time a simple/boring fact is at the root of it. However over time things get blown out of proportion or out of perspective, that is when mysteries and legends are born. Ofcourse later in time this name (Baphomet) may have gotten associated with/adopted by, Satan worship for which the image see here on the left is responcible. 
Here is what the book "The Templar code for dummies" says: "What Baphomet doesn't seem to have meant is what it has come to represent in modren times: the winged, goat-headed, cloven-hoofed demon that commonly appears on tarot cards. Nineteenth-century French mystic Eliphas Leví came up with the drawing for his book "Dogme at Ritual de la haute Magie" in 1854. Although Leví "claimed" Templar origins of his mystical figure, testimony from the trials of the templars, describe no such thing." (**)
(*) we use the term inventor here, because to us, the Templar Church, and to any other true Christian, this man was not an inspired prophet of God, because Jesvs was the last messenger send by God to mankind. This puts mohammad in the same group as ron l. hubbert who invented scientology and joseph smith, who invented the mormon church. see True Prophets
(**) The Templar Code for Dummies - part 2, chapter 6, page 147, last paragraph.