太 tài = 大 (dà, big) + 丶 (a single added dot). It is an indicative character built directly on 大, the picture of a person standing with arms outstretched to mean "big." Add one dot beneath, and 大 is pushed past its own size: bigger than big, the superlative, and then beyond the superlative into "too much." Historically 太 and 大 were closely tied, with 太 the emphatic form that took on "greatest" and "excessive."

Two related senses grow from that one extra dot:

1. Too, excessively (the degree adverb). Big past the proper limit: 太大 tài dà (too big), 太贵 tài guì (too expensive), and the warm 太好了 tài hǎo le (wonderful, literally "too good").
2. Highest, grandest, most senior. Big at the very top: 太阳 tàiyáng (the sun, the "supreme yang"), 太太 tàitai (madam, the lady of the house), 太极 tàijí (the Supreme Ultimate), 太空 tàikōng (outer space, the "grand void").

The thread is excess and supremacy. The extra dot tips 大 over an edge: in everyday speech that edge is "more than is good" (太累 too tired), and in titles and cosmology it is "more than all others" (the sun above the sky, the grandmother above the mother, the Supreme Ultimate above all forms).

The first 太 a learner uses is the degree adverb, placed before an adjective. It pulls in two directions depending on the final particle. With 了 le and a positive adjective it is warm and admiring: 太好了 tài hǎo le "wonderful!", 太漂亮了 "so beautiful!". Without that warmth, or with an unwelcome adjective, it means "too much, more than is good": 太贵了 "too expensive," 太累了 "exhausted."

The negative is the high-frequency softener 不太 bú tài, "not very / not too": 不太好 "not very good," 不太懂 "don't quite understand." It is gentler than a flat 不, the polite way to say no without slamming the door. Between 太…了 for enthusiasm and 不太 for mild denial, 太 is one of the most-used degree words in spoken Chinese.

Take 大, the person standing big with arms thrown wide, and drop one extra dot beneath. That dot is the whole difference: it pushes big over its own edge. In daily speech the edge is "more than is good," so 太 becomes "too": 太累 (too tired), 太贵 (too expensive). Add 了 and a kind word and the same excess becomes delight: 太好了 (wonderful).

Aim the dot upward instead and 太 becomes "bigger than all the rest": the sun above the sky (太阳), the most senior lady of the house (太太), the Supreme Ultimate above every form (太极). One dot past 大, and big becomes either too much or the very most.