Possibly from the Arabic word "jauhar", meaning gem or precious. What was Johor famous for? Did it have gems, gemstones and precious stones? No. It possibly referred to the strategic location of Johor with regard to sea trade routes frequented by the Arabs. Yes, most possibly. Why the Arabs and not the Indians, Chinese, or Europeans? No idea.
Source: http://johordt.gov.my/jkr/sejarahjohor.htm
In Kelantan, there is Istana Jahar (in local dialect) but it could be Istana Jauhar (in Arabic script).
The Malays also have a proverb, "Jauhari tak kenal manikam". What does it mean?
Transliteration becomes a problem for old Malay documents written in Jawi script as there is ambiguity in the vowels. Jawi has vowels but which can be omitted in normal writing - you read it without the vowels! Jawi also has vowels but with different pronunciation: a (alif as aa, ii, uu), ya (ya as ya, yi, yu), ya (ya as ee), alif-wau (alif-wau as ou), hamzah (as short aa, ii, uu) and others. When, translating even the script alone, there's ambiguity and variation. For this reason, the proposed book is limited to documents written in romanised Malay and a few documents written in Jawi. The assistance of experts in 3 or 4 languages are needed at times for transliteration purposes, especially when the Jawi scripts are not the usual ones we see today.