What's Up With the Title?
We'll have to pull double duty when discussing this title, as we have both a title and a subtitle to deal with.
The first part of the title, Star Wars Episode I, informs us of this movie's place in the Star Wars saga. Combined, the Star Wars saga tells the tale of a galactic-sized war centered on the adventures of the Skywalker family: Anakin Skywalker, his son Luke, and his grandson Kylo Ren.
Despite being the fourth film by release date—hitting theaters a whopping 22 years after the original—the label Episode I tells us it is the first chronologically. This film's story will launch all of the other Star Wars to come.
The subtitle, The Phantom Menace, tells us about this specific film. A phantom is something that lacks matter, like a mirage or specter. A menace is something that threatens and could potentially harm. Put them together, and there's really only one character the subtitle can describe: Darth Sidious.
Sidious stays in the shadows the entire film and only reveals himself through holographic communications—holograms that make him look particularly phantom-like, don't they? The one exception is his brief scene with Darth Maul, but even then, he keeps his face shrouded, looking like Death come to play a game of galactic-sized chess.
And like a menace, he threatens the peace and stability of the galaxy. He convinces Viceroy Gunray to start the entire occupation over trade taxes. He can also manipulate the Senate to do his will or, at the very least, manipulate senators to be totally ineffective at their job. (Hey, just like real politicians. Bah-zing.)
And by the film's end, Darth Sidious remains the phantom menace. Nobody knows who this mysterious figure is, how powerful he is, or what evil he might conjure next…
Okay, fine. We all know it's Chancellor Palpatine. But nobody in the film's universe knows. He's the phantom menace to them.