Arete is bound up with the notion of the fulfillment of purpose or function; the act of living up to one's full potential, but it's roots are in Manly Virtue:

"[Areté] is a word for which we have no simple equivalent in English. Areté includes the concepts of excellence, goodness, manliness, valor, nobility, and virtue. It existed, to some degree, in every ancient Greek and was, at the same time, a goal to be sought and reached for by every ancient Greek.  What's important for us to understand is that the word and concept of areté, which is one of the most important in ancient Greek culture, derives from Ares, the Greek God of War, the Warrior God --" (Prof Stephen Miller in his book Areté: Greek Sports from Ancient Sources)

"From the same root [ARES] comes areté ... the first notion of goodness being that of manhood, bravery in war; cf. Lat. virtus." (Liddell and Scott's Ancient Greek Lexicon)

In modern usage, "Virtue" has become "sissified" into something akin to being "nice", but it is actually related to VIRILE (late 15c.) "characteristic of a man; marked by manly force," from Middle French viril (14c.) and directly from Latin virilis "of a man, manly, worthy of a man," from vir "a man, a hero,"