Minify is the opposite of magnify. I learned the word minify from Alvy Ray Smith (one of the giants of the Lucasfilm Computer Division and cofounder of Pixar) in 1983. Minify meant to make an image smaller, to reduce it, to scale it down, to zoom out.
.js files smaller so that it took less time to push them across the wire. Remembering Alvy, I called the operation minification, and I named the first minifier program JSMin. It is still the fastest minifier, not that that matters.
There are now image minification tools that make image files smaller, but do not reduce the image. The makers of these tools took my example, unaware of prior conventions in computer graphics. So I have inadvertantly created a confusion. Image minification now has two different meanings. I am sorry about that.