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According to John Blofeld, the term Buddha actually has a triple significance.
First, it refers to the historical Buddha, Sakyamuni (Shakyamuni) Buddha. There have been countless Buddhas who have appeared and will continue to appear on earth. Many of their stories are told in the Buddhist Jataka Tales. Sakyamuni Buddha is the Buddha of this era, having removed all obscurations to become a fully awakened one. Sakyamuni was born a member of the Sakya clan in Lumbini, Nepal in 563 B.C. Born as Prince Gautama, after witnessing old age, sickness and death, he left the comforts of his home to find a way to end suffering for all people. He attained enlightenment after many years of fasting and meditation, finally defeating Mara, or delusion, while meditating under a bodhi tree. The Buddha then went on to teach the dharma of four noble truths, the eight-fold path and other teachings to help lead sentient beings to enlightenment.
Secondly, the term Buddha is used as a name for the spiritual principle underlying Buddhahood. One could call this the 'urge to enlightenment'.
Thirdly, Buddha is that which is 'human in outline, but imbued with splendor'. This is how the Buddha is seen in the mind, in visions, dreams and statues.
Originally there were no images of Buddha, as he himself did not believe in them. He was represented as the wheel of the Dharma. Gradually, around the 1st c. A.D., images of Buddha began to appear.