The basic question being asked here is an etymological rather than a musical one, and I think the best way to answer it is to forget about chords for a moment and concentrate on the individual notes of the scale.

The basic note of the scale, the note on which the tune ends, is the "tonic", (deriving from "tone", I assume). Thus in the scale of C major the tonic note is C.

Now, if you sound the note of C on a guitar or a piano, certain overtones (other notes than C) are generated simultaneously, by far the strongest of which is the note of G, which is the fifth note of the scale of C major. Other overtones generated, less strongly, are the third E, and C an octave above the struck note. The strength of the G overtone, is the reason, IMHO, why G is said to be the "dominant" note of the key of C.

Now to chords. The "dominant seventh" chord is simply a conventional way of referring to the major triad formed by taking the dominant note of the scale as the root of the chord, and ading the flattened seventh note.

As an aside, I have always thought it strange that the convention of naming chords as C7, G7 etc should have been adopted for chords containing a flattened seventh. I would have thought it more logical that the chord which we know as Cmaj7 (C-E-G-B) would be designated as C7, and that the chord which we call C7 (C-E-G-Bflat) would have been called C flattened seventh (maybe C7flat) in shorthand. But I digress....

Murray