The story
Coined by J. R. R. Tolkien in his constructed language Sindarin as mithril, modified from various forms such as ithil and later thilevril in Tolkien’s earlier conception of the language (‘Noldorin’) and diegetically explained as mith (“pale grey”) + a derivative of the Primitive Elvish root *ril- (“brilliant light, glitter”).
Etymology from Wiktionary, CC BY-SA 4.0.