The usual Sindarin word for “cloud” (PE17/36, 174; RGEO/66). As Tolkien explained it “The S. form fân, fan- was usually applied to clouds, as veils over the blue sky or the sun or moon, or resting hills” (RGEO/66). This use meant it was largely limited to white clouds in fair weather (PE17/36; Let/278); a dark or stormy cloud would be [ᴺS.] lum (see that entry for discussion). In an essay written around 1967 Tolkien indicated that fân had a second meaning:

In Sindarin *phanā > fân meant a “veil”: a covering concealing what lay within or behind. It was frequently used of clouds in the sky, as veils over the blue heaven or the sun, moon, stars. This indeed became its leading sense, so that when it was still used of lesser and handmade things this was felt to be a transference of the sense “cloud” and fân was seldom applied to any but things of soft textures, such as woven veils, mantles, or curtains (PE17/173).

Thus in addition to “cloud”, fân applied to soft handmade veils or curtains (from its original sense). But the word had a third meaning as well, with a more complex origin:

√PHAN-. The basic sense of this was “cover, screen, veil”, but it had a special development in the Eldarin tongues ... In Quenya, owing to close relations of the Eldar in Valinor with the Valar, and other lesser spirits of their order, fana developed a special sense. It was applied to the visible bodily forms adopted by these spirits, when they took up their abode on Earth, as the normal “raiment” of their otherwise invisible being ... This Quenya meaning of fana after the coming of the Exiles to Middle-earth was also assumed by Sindarin fân, at first in the Sindarin as used by the exiled Noldor, and eventually also by the Sindar themselves, especially those in close contact with the Noldor or actually mingled with them (PE17/174-176).

Thus, owing to the Quenya meaning of the word, the Sindar also used fân to referred physical form of the Valar and other spiritual beings, as well as visions of such beings (PE17/26), since the Sindar had relatively little direct experience of the Valar. For spirits, being embodied was not their natural state, so their fân was like “clothing” a spirit could wear to interact with the physical world.

Conceptual Development: In The Etymologies of the 1930s this word was N. faun “cloud” derived from primitive ᴹ✶spāna based on the root ᴹ√SPAN “white” (Ety/SPAN). In one note from around 1957 Tolkien considered using S. fân for an embodied spirit or soul, the equivalent of Q. fëa (NM/237), but elsewhere this was S. fae (MR/165; PM/343). For the most part in later writings, Tolkien used fân for “cloud” and related senses, as discussed above. Furthermore, in later writings it was a derivative of √PHAN rather than 1930s ᴹ√SPAN.