Sometimes used to mean the large robot, sometimes the small figure/head. (Japan only: some heads were brought out without bodies, and all heads were interchangeable between robots, making more sense of the term "headmaster").
Of course, it also means a male head-teacher (now rarely used for PC reasons) - presumably it's a play on words (used as a model for later names such as Powermaster, Targetmaster etc.). Initially appeared in series 4 of generation 1.
Also, the first series of the Japanese Transformers cartoon (the 4th series overall) is called "TransFormers Headmasters".
The Headmaster Vorath is binary bonded to the transforming robot Mindwipe.