It does mean wrong but it needs har, and it comes from Middle Low German feil/fēl, which is borrowed from Old French faille, which is derived from Latin fallere meaning "to mistake" or "to deceive" - so har fel means basically "have (something) mistaken" or "have (it) wrong" if that helps.
Why is it not "Han är fel?" Is it just because in Swedish it is used that way and we have to remember it? Or anyone can explain me in better way? I have gone through the comment section but not yet able to understand as most of them have reference with Dutch / French / Portuguese. I am not an European, hence I can only take the reference with English. It would be very helpful if someone can explain it to me. Thanks in advance.
It is used that way in Swedish. It seems to be like "He has an error." or "He has a fault." and I got that from this lesson discussion, so you might want to reread that. They don't say "He is wrong." and instead say it this way. So consider it an idiom to translate. Many languages use "have" in situations like this where in English we use "is", so it is English that is different. Another example is when we say "I am hungry." but the other languages say "I have hunger."