To appreciate the usage of "monad" as a mathematical term it helps to go back nearly two millennia to the origin of this term in algebra: Diophantus of Alexandria used monad (denoted $\dot{M}$) in his book Arithmetika to indicate the zeroth power of the unknown variable. "All numbers consist of a certain multitude of monads." Think of "monad" as "unit-one". In a later development, Archimedes used monads as building blocks for larger units , for example "myriad" was the "unit-ten-thousand" and "chiliad" the "unit-thousand".
It would seem the modern usages of "monad" follow this ancient line of thought, to indicate "a single entity that generates all other entities".