The word cosmid is derived from cos sites of lambda phages.
Why are cos sites called cos sites? What does this "cos" refer to?
"Cos" is the abbreviation of "cohesive end site". This is a speciality of the lambda phage which has to be linearized to fit into the phages head, but circularizes in the host cell. To achieve this, it has the cohesive (or sticky) sites at each end.
The 12 bp overlapping sticky ends at the termini of pure lambda DNA are generated during DNA packaging. Another term for this complementary base-pairing is "cohesive" and so cos is an abbreviation of that term. I believe it was italicized because it could also be mapped genetically. Scott Emmons is credited with coining this term (and using it first) when he was a grad student at Stanford.
Cos is for "cohesive," as in these sites rather easily recircularize the linear phage DNA through complementary base-pairing (they're sticky ends, generally G-C rich). See Wikipedia.