The man who named the online world did not know what his word meant. That was rather the point.
William Gibson used "cyberspace" in his 1982 short story "Burning Chrome." The Oxford English Dictionary, quoted by the site Interesting Literature, says the word was "apparently coined" by Gibson there. Etymonline also credits Gibson and the 1982 date, and notes that early uses often wrote it as two words.
The word reached a wide audience two years later in his novel Neuromancer. There Gibson defined cyberspace as "a consensual hallucination experienced daily by billions of legitimate operators, in every nation." At the time it described a world that existed mostly in his fiction.
Gibson has been frank about where the word came from. Wikipedia reports that in the 2000 documentary No Maps for These Territories, he called it "an effective buzzword." He said it "seemed evocative and essentially meaningless." He was inventing a setting for fiction, not naming a technology.
He did not invent the parts. Cyber- comes from cybernetics, a word mathematician Norbert Wiener coined in 1948 for the study of communication and control. Etymonline traces it to Greek kybernētēs, "steersman." It adds that Wiener may have modeled it on French cybernétique, a word from the 1830s for the art of governing.
There is one earlier cyberspace. In the late 1960s, Danish artist Susanne Ussing and architect Carsten Hoff worked together as Atelier Cyberspace. Wikipedia says their installations were titled "sensory spaces" and could adapt to influences such as human movement. Interesting Literature stresses that these were real, physical spaces, not virtual ones.
Gibson's word then pulled the prefix along with it. Etymonline lists cyberpunk by 1986 and cybercafe from 1994. One researcher counted 104 words built with cyber- by 1994. Etymonline now defines the word as the online world of computer networks, especially the internet. Gibson's meaningless buzzword ended up with a very specific meaning.