Note that in Japanese, Korean and Simplified Chinese scripts, the top half of the character is 土 (instead of 士 as seen in Traditional Chinese), which is also the historical form found in the Kangxi Dictionary.
Phono-semantic compound (形聲, OC *ljɯs): phonetic 𡳿(OC *tjɯ, “to go”) + semantic 又(“hand”) – to grasp, to hold. Phonetic 𡳿 (之) became 土 or 士 in the clerical script from the late Western Han to the Eastern Han, and semantic 又 become 寸 in Small Seal Script. The derivative 持 (OC *l'ɯ) refers to the original word.
The character was often used in the place of a more specialized form. For example, in the Chu Silk Manuscript (see table above) it clearly stood for 時 (OC *djɯ, “season”).
Other sources describe Japanese tera as cognate with modern Korean찰 (刹, chal, “temple”), appearing as a component in terms such as 선찰 (禪刹, seonchal, “Zen temple”), 사찰 (寺刹, sachal, “Buddhist temple”).
Considering the phonetic development in Korean, the avenues for transmission of Buddhist terms to Japan, and the consistent temple sense of the Japanese term throughout recorded history, the now-obsolete Korean뎔(dyeol, “temple”) may be a more likely source than Palithera(“elders”).