I have to consult Wikipedia to give you an answer ^^.

According to modern scholarship, the name Scheherazade derives from the Middle Persian name Čehrāzād, which is composed of the words čehr (lineage) and āzād (noble, exalted).
The earliest forms of Scheherazade's name in Arabic sources include Shirazad (شيرازاد Šīrāzād) in Masudi, and Shahrazad (شهرازاد Šahrāzād) in Ibn al-Nadim, the latter meaning in New Persian "the person whose realm/dominion (شهر šahr) is free (آزاد āzād)". It is shortened as "Shahrzad" (شهرزاد Šahrzād/Šarzād) in modern Persian.

Thank you for your comment, I appreciate it a lot :).