Unfortunately, I did know it meant liver, and also knew what braunschweiger was, and still ate both. The stuff is terrible for you, and while I didn't loathe it, I didn't see what the big deal was about either stuff. It was pretty bland. Give me chips and salsa anyday.
In a word: paste. I believe the French use the word to mean anything from pastry dough to clay to library paste, and it certainly fits pate de foie gras.