Not everything is logical when it comes to etymology.:P Plus, it's not completely illogical. As Spoonashy said, the word is a combination of οκτώ (eight) + πόδια (legs). So χταπόδι is literally described as something that has 8 legs. :P
The program rejected my answer because I used οκτώ instead of οχτώ. Considering that οκτώ is used at least as often as οχτώ in written and spoken Greek, it makes sense to add it to the vocabulary of the course.