Etymology
Some words are "borrowed" from other cultures. For instance, Modern English contains thousands of words that originated in Greek, Latin, Norman French, Saxon German and Danish. Etymology traces the transitions between cultures and looks at the components to elicit meaning.

Western Languages.
Western languages tend to use an alphabet (Roman, Greek, Cyrillic) made up of arbitrary shapes that represent phonemes (consonants and vowels). There is not necessarily a connection between these sounds and the things they represent.

Chinese Languages.
The world is described in terms of a complex set of characters called Hanzi. Each hanzi has an image and has one or more meanings dependent on context. The same set of hanzi are used throughout the Chinese-speaking world but can be pronounced differently in different regions (Mandarin, Cantonese, Hokkien etc.). Chinese is a pitched language. The Pinyin pronunciation is that of modern Mandarin.

Transition to Japan
Around 540 CE the hanzi made their way to Japan along with Buddhism and cultural ideas. Prior to this time the Japanese language did not have its own script. The Japanese reading for hanzi is kanji.

Initially the kanji retained a modified, unpitched form of the original Chinese pronunciation and were used for record keeping. They retained the Chinese order of writing. Later the kanji were assigned the native Japanese sounds (known as kun readings).Two phonetic syllabaries known as hiragana and katakana to filled in the gaps and the sequence of writing the kanji was changed to more closely follow Japanese grammar. The "classical" language went through several changes throughout the Nara, Heian, Kamakura and Edo periods. In modern times the Japanese grammar has been simplified. In recent years this "modern" Japanese has been written with simplified kanji, culminating with the Joyo revision of 1981.

In general, terms originating in China are given ON readings and those developed in Japan are given kun readings. There is often a semantic difference between the ON and kun readings of a kanji. Kanji often occur in groups of 2 or more (known as compounds) which do not necessarily have the meaning of the constituent kanji. In order to get an accurate understanding the meaning of material imported to Japan from China it is necessary to use a character dictionary and to understand the semantics and etymology of a given compound before and after its import to Japan. This information is not necessarily known by native Japanese who already have to learn over 2000 kanji, 46 katakana and 46 hiragana by heart in the first 5 years of school. Modern Chinese can use around 50,000 kanji with around 5000 in common use!

Compounds
Imagine a French dictionary that is divided into syllables. Let us further imagine a tourist with no knowledge of French who sees a sign: CHATEAU and picks up his syllable French dictionary and looks up each syllable.

CHAT -  a cat

EAU -  water!

Ah! a place where cats can drink (or bathe maybe)... We cannot divide French words like this!!!!  Neither can we break up kanji compounds and translate them individually. We need to look in a character dictionary.

KI
This kanji is pronounced QI (chee) in China. The original image  was of "nothing" over fire .  Here is the classical form:  and here is the modern, simplified kanji:   which has the lower 6 strokes representing rice reduced to 2. The ON reading is KI or KE and the kun reading is iki.

The image of this character is the vapour  ascending from rice  during cooking but the meaning is Spirit or mind as it relates to Man on Earth.  In Taoist cosmology QI nourishes a "metal soul" known as PO. It is also used in Japan to mean mood, intention, atmosphere or even smell. There is an application of this kanji used in Chinese Medicine that describes a transport system of a fluid similar to that of blood that flows in a system of vessels known as jing-luo. These vessels are called "meridians" in the West where QI is interpreted as a form of energy.

REI
This kanji is pronounced LING in China. The original image for REI  is in two parts. The upper part shows (3 drops of) rain  descending from the heavens. 
Below are two people working together in harmony  (in this case to collect the raindrops). 
 

In a more esoteric context the image becomes a shaman summoning rain. The Chinese simplified image is hand over fire (warmth) .  In the Japanese simplified form  the raindrops become a horizontal line and the lower image is replaced by a container to catch the rain. Note that there is no difference in meaning between the old and new forms –only the image is changed. The ON reading is REI or RYO and the kun reading is tama. The meaning is Soul or spirit as it relates to Man under Heaven.  In Taoist cosmology LING nourishes a "wood soul" known as HUN.

REIKI
Reiki is a compound of REI and KI imported directly from China where it is pronounced LING QI. In Taoist cosmology the act of conception unites the souls called HUN and PO. When that being dies HUN returns to Heaven to be reborn in another incarnation and PO returns to Earth. However, if that being achieves a state of "nirvana" it may choose not to "die" in which case the souls remain on Earth and may become a source of guidance to those who come after. The result is simply a presence, not a "form of energy". It is only in very recent times that this term has been used to describe a specific form of energy connected with Usui Mikao and others of the post-Meiji period in Japan.

In the mid 1990s my associate Shen Lissa stayed for a month with Tatsumi-san who was a student of Chuujirou Hayashi from 1927 to 1931. One day she pointed to a photo of the Usui concepts in Tatsumi-san's house. She noted the term "Reiki" and said that this was how the West referred to the hand healing system. Tatsumi-san said that the hand healing was simply referred to as te-àte, and that by using the term "reiki," O-Sensei (Usui Sensei)  had been referring to his ancestors. Usui Reiki Ryoho simply means 'Usui system for connecting with your ancestral self'- something that is already within each one of us from the moment of conception.

Shen Lissa mentioned that in the West it was believed in some quarters that there was a special form of intelligent energy called Reiki that could only do good. Tatsumi-san had not heard of this either and said that if it were intelligent then why would it respond to a set of moral values and why would it need someone to "give’ the energy.