"Contra (魂斗羅) is a video game series produced by Konami comprised primarily of run and gun-style shoot-'em-ups. The series debuted in 1987 as a coin-operated arcade game simply titled Contra, which was followed by the release of Super Contra in 1988 and several sequels produced for various home platforms.
The in-universe use of the term "Contra" is first explained within in the Japanese instruction card of the arcade version of Contra, and reiterated in most games (including Contra: Shattered Soldier), as "a title awarded to a superior soldier possessing almost super human drive and ability, while excelling in guerrilla tactics".
In Japanese, the title is spelled with the kanji characters 魂斗羅 or Kontora. This is a form of ateji, in which the characters are used for their phonetic pronunciations rather than any inherent meaning they may have.
The arcade version of Contra was released on February 1987, a few months after the Iran-Contra affair was made public. While it is unclear whether the game was deliberately named after the Nicaraguan Contra rebels, it should be noted that the ending theme of the original game was titled "Sandinista" (サンディニスタ), after the adversaries of the real-life Contras"
Source: Wikipedia, "Contra_(series)", available under the CC-BY-SA License.