From 西 (xī, “west”) and 藏 (Zàng), the latter a transcription of Tibetan གཙང(gtsang, “a region in Tibet encompassing Gyantse and Shigatse”). Using this word to refer to Tibet in general was fairly recent [from 20th century].
The old Chinese words for Tibet were 蕃 (fán), 土蕃 (Tǔbō, Tǔfán) and 吐蕃 (Tǔbō, Tǔfán).