I think it's supposed to be both, since they both make so much sense. I believe Paarthurnax refers to you as "Dragonborn" so that's still accurate. Pretty sure both were intentional on Bethesda's part, though.

The problem is that the first Dovahkiin, if I'm remembering correctly, did not hunt dragons. Miraak was a Dragon Cultist.

According to obscure Nordic sources, ancient Dragonborn heroes would have appeared as dragons. That's considerable weight to the Dragonborns literally having a "kiin" type relation to the Dov. Also, dragonborn means dragon-blooded, which means being of the lineage of dragons. The "hunter" etymology would have been a later (mis)translation if it were to be true - not the original meaning.

Actually, Miraak betrayed the dragons and devoured their souls. His temple on Solstheim is surrounded by dragon skeletons.

Although, come to think of it, those dragons must have died recently. They certainly weren't there when the Nerevarine was on Solstheim. Heck, that entire mountain was missing.

As for the translation of "Dovahkiin", I'd say "Dragoborn" is the original translation. Dovahkiin are certainly better at fighting dragons than most mortals, but any dovah can absorb souls, as far as I know. Also, the three-word name thing only seems to apply to the names of individual dragons.

I was under the impression that the temple and the skeletons were uncovered due to Red Mountain's eruption. Also, the geography in Morrowind, as a game, was pretty out of whack due to graphical limitations at the the time, I think.

I've read something about those skeletons getting there after miraak's revolt. Almost sure it was "official"