The original spelling of this word in the Old Norse language is Fimbulvetr, fimbul meaning "the great/big" so the correct interpretation of the word is "the great winter".
There have been several popular speculations about whether this particular piece of mythology has a connection to the climate change that occurred in the Nordic countries at the end of the Iron Age. Before this climate change, the Nordic countries were considerably warmer.
In Sweden, Norway and other Nordic countries, the term fimbulwinter may also casually be used to refer to any unusually cold and harsh winter with lots of snow.