What does "bury the hatchet" mean?

Make peace; settle one's differences. For example, Toward the end of the year, the roommates finally decided to bury the hatchet. Although some believe this term comes from a Native American custom for declaring peace between warring tribes, others say it comes from hang up one's hatchet, a term dating from the early 1300s (well before Columbus landed in the New World). The word bury replaced hang up in the 1700s.