Literally: A good final sealing
Idiomatically: May you be inscribed (in the Book of Life) for Good
“Gmar” comes from the root word that means to finish. Although it’s not biblical, it appears quite a bit in the Talmud (Avot 2:16 Yevamot 12:6). Chatimah is also talmudic and can mean a signature or a sealing (Pessachim 104). The word “chotemet” or stamp (the ink kind, not the postal kind) is a derivative of “chatimah.” Of course “tova” means good. The days of repentance are divided into two parts: The first the inscribing begins on Rosh Hashana and finishes Yom Kippur when the final “sealing” (chatima) of our fate takes place. Many sages give us a second chance – an extra 12 days until a really final sealing on Hoshana Rabba (the 7th day of Sukkot).
That is why many people finish their correspondence during this time of year by writing or saying Ktivah V’chatima Tova – “may you be inscribed and sealed for a good year.” On or right before Yom Kippur, people modify that and wish “Gmar Chatima Tova.” Technically you can say it means ‘may your finished sealing be good’ – which would be fine if you are redoing your apartment, but for the rest of us may you all have a healthy peaceful and fulfilling year.