Andre Faria:During the judicial proceedings and inquisitions that occurred during the suppression of the Templars, the name "Baphomet" was revealed as the name of an idol allegedly worshipped by the knights. These confessions and statements were made under torture or the threat of torture, and were later recanted; their historical value must be assessed in light of that fact. The Templar idol has been variously described as: an idol with a human skull, a head with two faces, a cat idol and a bearded head. The word's questionable etymology is discussed below.

During the suppression of the Knights Templar it was claimed by the Inquisition that the knights used a Baphomet as part of their initiation ceremonies. This, among other assertions, sealed their Order as heretical.

Eliphas Levi and Baphomet
A much more recent and well known depiction shows Baphomet in the form of a winged humanoid goat with a pair of breasts and a torch on his head between his horns. This image comes from Eliphas Lévi's 1854 Dogme et rituel de la haute magie (in English known as Transcendental Magic). Lévi considered the Baphomet to be a depiction of the absolute in symbolic form. Lévi on the symbolism of his drawing:

"The goat on the frontispiece carries the sign of the pentagram on the forehead, with one point at the top, a symbol of light, his two hands forming the sign of hermetism, the one pointing up to the white moon of Chesed, the other pointing down to the black one of Geburah. This sign expresses the perfect harmony of mercy with justice. His one arm is female, the other male like the ones of the androgyn of Khunrath, the attributes of which we had to unite with those of our goat because he is one and the same symbol. The flame of intelligence shining between his horns is the magic light of the universal balance, the image of the soul elevated above matter, as the flame, whilst being tied to matter, shines above it. The ugly beast's head expresses the horror of the sinner, whose materially acting, solely reponsible part has to bear the punishment exclusively; because the soul is insensitive according to its nature and can only suffer when it materializes. The rod standing instead of genitals symbolizes eternal life, the body covered with scales the water, the semi- circle above it the atmosphere, the feathers following above the volatile. Humanity is represented by the two breasts and the androgyn arms of this sphinx of the occult sciences."
Lévi's depiction, for all its fame, is not particularly authentic to the historical description from the Templar trials, although it is not unlike gargoyles found on several Templar-built churches— or Viollet-le-Duc's vivid gargoyles added to Notre Dame de Paris about the same time as Lévi's illustration.

Baphomet as a demon
Baphomet, as Lévi's illustration suggests, has occasionally been misunderstood as a synonym of Satan or a demon, a member of the hierarchy of Hell. Baphomet appears in that guise as a character in James Blish's The Day After Judgment. Jack Chick claims that he is a demon worshipped by Freemasons, a claim that apparently originated with the Taxil hoax. The head of Lévi's Baphomet was inscribed with a pentagram which is a symbol occasionally adopted by Wiccans and other students of the Occult. A goat head inscribed within an inverted pentagram, the upper points filled by the horns, the side points by the ears, and the bottom by the bearded chin, is a symbol occasionally adopted by Satanists and other followers of a Left-Hand Path. The head, horns and torch together take the form of a Fleur-de-lis.

A different interpretation of Baphomet is given by the Satanic group the Order of Nine Angles. According to the ONA, Baphomet is female, and is depicted as a beautiful mature woman, naked from the waist up, who holds in her hand the severed head of a bearded man. "The name of Baphomet is regarded by Traditional Satanists as meaning "the mistress (or mother) of blood" - the (Satanic) Mistress who sometimes washes in the blood of her foes and whose hands are thereby stained.

Etymology of the name "Baphomet"
Many theories exist as to the origin of the term, including:

From the Greek words 'Baphe' and 'Metis'. The two words together would mean "Baptism of Wisdom".
Atbash cipher for the Goddess Sophia. Dr Hugh Schonfield, one of the scholars who worked on the Dead Sea Scrolls, believed that the word "Baphomet" was created with knowledge of the Atbash substitution cipher, which substitutes the first letter of the Hebrew alphabet for the last, the second for the second last, and so on. "Baphomet" rendered in Hebrew becomes בפומת; interpreted using Atbash, it becomes שופיא, which can be interpreted as the Greek word "Sophia", or wisdom.
A deformation of the Latinised "Mahomet", a mediæval European rendering of Muhammad, the name of the Prophet of Islam.
Idries Shah proposed that "Baphomet" may actually derive from the Arabic word ابو فهمة Abufihamat, meaning "The Father of Understanding," and associated with Sufism.
Lévi proposed that the name was composed from a series of abbreviations: 'Temp. ohp. Ab.' which originates from Latin 'Templi omnium hominum pacis abhas,' meaning "the father of universal peace among men." An alternative reading could be tem. o. h. p. ab. for templi omnium hominum pacis abbas. The translation in this case is abbot of the temple of peace of all mankind, perhaps referring to the Templars themselves.