I took Latin in high school because I liked etymology (and because greek letters were really too weird):
From Latin intellegentia ("the act of choosing between, intelligence"), from intellegō ("understand"), from inter ("between") + legō ("choose, pick out, read"). [taken from wiktionnary]
So intelligence is the ability to understand, that's all (the etymologic link with dichotomy is beautiful).
Now how we understand (and please don't confuse yourself again with "oh yeah but what does 'understand' really mean") is the hard part.