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Current Spanish usage describes any kind of competition between two people where they both compete trying to outdo each other.
Within the Doce Pares Eskrima fighting system, it is one of the three ranges of engagement, specifically the closest one. This does not indicate solely unarmed combat.
This term has been adopted in English with similar meaning, possibly by Ernest Hemingway. The English adoption can be likened to the phrases "one on one," "head to head," or "single combat" and conveys the idea of intense competition. It is commonly used by English speakers to mean "man to man."
French sometimes use this expression in a blend of Portuguese and Spanish meaning. “Donner quelque chose de mano y mano” means to give something to someone in person, with direct physical contact (as opposed to using an intermediary, be it a common friend, a phone call or an e-mail).