The name of the project was Heretic II, originally. The name Hexen has been invented in the latest stages of development. And as programmers go, the Hexen source code has the header "Heretic II" in all source files up to this day... :-)
It's anyone's guess what the game's title, "Hexen" does mean. In German, the word means "Witches" but it might imply to something else. Also it's most probably not by chance that the word begins with "he" like "Heretic".
Some of the names in Hexen aren't just foreign-sounding... they also have a meaning. The ultimate enemy's name is taken from the ancient Greek language where "Korax" means "Raven". The "Heresiarch" is the "Prince of the Heretics", and "Chronos" (name of the world of Hexen) means "Time" (both from ancient Greek as well).
Regarding some other names, one can only speculate. While "Parias" might come from "Pariah" which means "Outcast" and "Daedalon" might come from "Daedalus", a figure in ancient Greek mythology (the father of Icarus), I might be wrong on these ones. Same goes for "Zedek", which might mean "Righteous", and "Traductus", which might mean "The One Who Has Been Led Over To The Other Side".