Jesus the Nazarene is a term that orthodox Christian have come to use that denotes that Jesus is from Nazareth, with Nazarene meaning someone who comes from Nazareth.
We hear from Matthew 2:
Then after being warned by God in a dream, he left for the regions of Galilee, 23 and came and lived in a city called Nazareth. This was to fulfil what was spoken through the prophets: “He shall be called a Nazarene.”
So not only is Jesus from Nazareth (as an adult), but in being so (in Joseph deciding to move there after running off to Egypt for two years), he fulfils prophecy.
The problem here is multi-faceted, most of which comes from the fact that 1) this prophecy is unknown and 2) it appears that “Nazarene” does not actually mean someone from Nazareth.
The OT prophecy
If this is to fulfil a prophecy, does Matthew here have Jesus go and live in Nazareth because he wants to fulfil a prophecy (that he has misinterpreted) or does he know that Jesus, as an adult, heralded from Nazareth, and looked back in older texts to see if he could find one to show such a place fulfilled a prophecy, and could only find one such “prophecy” by wrongly interpreting it?
As the article “Is there a missing prophecy of the Nazarene?” states:
At no point in the Jewish Scriptures is the Messiah referred to as a Nazarene. Despite Matthew’s statement, there is no prophecy, which mentions that the Messiah will be an inhabitant of Nazareth. In fact, the town of Nazareth is never mentioned in the Jewish Bible.
It has been speculated that what Matthew is referring to is the description of the Messiah as a netser (“shoot“), i.e., a new, flourishing growth from the Davidic line. This term first appears in Isaiah: “And there shall come forth a shoot out of the stock of Jesse, and a branch out of his roots shall bear fruit” (Isaiah 11:1). But despite Isaiah’s use of the term, it is nowhere indicated that the Messiah would actually be called netser. An alternate suggestion connects Matthew’s usage with the word natsar, “guard,” “keep.”
It cannot be that Matthew is referring to the Messiah as being a Nazarite, for nowhere in the Jewish Scriptures is it stated that the Messiah will ever take the Nazarite vow. Furthermore, the spelling of the words Nazarite, nazir (from the Hebrew root N-Z-R), and Nazarene, notsri (from the Hebrew root N-TZ- R), are not the same in Hebrew.
So given that no prophecy states that the Messiah will come from Nazareth, how do we square the circle? As Wikipedia summarises:
The Gospel of Matthew explains that the title Nazarene is derived from the prophecy “He will be called a Nazorean”, but this has no obvious Old Testament source. Some scholars argue that it refers to a passage in the Book of Isaiah, with “Nazarene” a Greek reading of the Hebrew ne·tser (branch), understood as a messianic title. Others point to a passage in the Book of Judges which refers to Samson as a Nazirite, a word that is just one letter off from Nazarene in Greek. It is also possible, that Nazorean signs Jesus as a ruler. 
The Greek New Testament uses “Nazarene” six times (Mark, Luke), while “Nazorean” is used 13 times (Matthew, Mark in some manuscripts, Luke, John, Acts). In the Book of Acts, “Nazorean” is used to refer to a follower of Jesus, i.e. a Christian, rather than an inhabitant of a town. “Notzrim” is the modern Hebrew word for Christians (No·tsri, נוֹצְרִי) and one of two words commonly used to mean “Christian” in Syriac (Nasrani) and Arabic (Naṣrānī, نصراني).
A Nazarite, as Samson was, is a sect of believers that has nothing to do with Nazareth, and Nazorean tells us nothing. Nazarene as a reading of “netser” also has nothing to do with Nazareth.
Either way, Matthew is getting this prophecy wrong, even if we can establish that it actually exists as a prophecy somewhere.
Now, this isn’t to say that Jesus wasn’t from Nazareth, only that Matthew is wrong in drawing a causal connection between this unknown prophecy and living in Nazareth.
As Hayyim ben Yehoshua in an online essay, Refuting Missionaries, says:
But why did the Christians believe that he lived in Nazareth? The answer is quite simple. The early Greek speaking Christians did not know what the word “Nazarene” meant. The earliest Greek form of this word is “Nazoraios,” which is derived from “Natzoriya,” the Aramaic equivalent of the Hebrew “Notzri.” (Recall that “Yeishu ha-Notzri” is the original Hebrew for “Jesus the Nazarene.”) The early Christians conjectured that “Nazarene” meant a person from Nazareth and so it was assumed that Jesus lived in Nazareth. Even today, Christians blithely confuse the Hebrew words “Notzri” (Nazarene, Christian), “Natzrati” (Nazarethite) and “nazir” (nazarite), all of which have completely different meanings.
So this is not to say that Jesus doesn’t in some way fulfil the prophecy of somehow being “netser” or a “shoot”, because this sounds like it would require subjective interpretation of language; but there is no way that Jesus is a Nazarite. Since Nazarene does not refer to Nazareth, then Matthew definitely has his claim wrong – you cannot connect the term to the place.
Please grab a copy of my book on the Nativity (The Nativity: A Critical Examination) [UK].
 http://mama.indstate.edu/users/nizrael/jesusrefutation.html (retrieved 16/02/2012)
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