As many are aware, Tolkien derived the name 'Saruman' from Old English. The entry in Bosworth- Toller for searu starts with ambiguity (I.) and moves straight to the 'bad sense' (II.). The good sense (III.) comes in a distant and by comparison feeble third, all the examples of which are adverbial uses of the instrumental case. searwum, 'skillfully, ingeniously, with art'. Amid the wealth of marvelous, damning examples under sense II. we find right near the end of the section a quote from the Blickling Homilies (173.8) in which St. Peter tells St. Paul of Simon Magus and recounts
'Hwylce searwa se drý árefnde what artifices the sorcerer practised'
So while it is true to say that searu can be either negative or positive, the surviving evidence indicates that negative is the far more common meaning. When we also consider that the word is so frequently ambiguous that this uncertainty merits the first place in the dictionary entry, it seems a fitting source for the name of a wizard who, even as his 'wickedness' was 'laid bare' (TT 3.ix.567), had proclaimed himself no longer Saruman the White, but 'Saruman of Many Colours' (FR 2.ii.259):
'I looked then and saw that his robes, which had seemed white, were not so, but were woven of all colours, and if he moved they shimmered and changed hue so that the eye was bewildered.'Since Tolkien named him Saruman from his first appearance in his plot outlines (Treason 70, 72-73), his character and his fate were coeval with his name.