The meaning is ‘little white hilt’,
In Culhwch and Olwen, Arthur includes the dagger in his list of possessions that he will not give to Culhwch. Near the end of this tale, Arthur slays the Very Black Witch, daughter of the Very White Witch, with the dagger by slicing her body in half.
Carnwennan also appears in the 15th century “Twenty-four Knights of Arthur’s Court” as one of a triad of weapons that God had given to Arthur, along with Arthur’s sword (Caledfwlch), and his spear (Rhongomyniad).
It is sometimes attributed with the magical power to shroud its user in shadow.