My surname is Rao. I am from Bangalore (south) India. This form of the surname goes back to my grandfather born a 100 years ago. The Indian form of the name 'Rao' originated from 'Raya', which probably indicates a landowning person ( or maybe an important person). We still use the term 'Maha raya' casually in our conversations - ("here comes the maha raya - the big man").
Raya has Sanskrit roots I think - in Malaysia (many Sanskrit names/words are found in the culture) roads are called 'Jalan' and highways are frequently referred to as 'Jalan Raya'.
So much for Rao. In India Rao's are primarily found in 2 states Karanataka and Andhra Pradesh. My ancestors hailed from the border area of these 2 states.
I am pleasantly surprised to see persons of Italian descent having this name. What does it mean in the Italian culture ? Next time I hear the name Rao, I will know not to jump at that person and address him : How are you Maha Raya !