Follow the directions in this superuser answer which describes using the iTerm custom key bindings to map ⌥ + ⇧ + ← to select by word. Its smart to make new key mappings in a profile to test it out, rather than the main keys preference.
Suggested keybindings
iTerm: Preferences > Profiles > Keys
Click + to add a keybinding, Click to Set
⌥ + ← | Action: Move start of selection back > Move by character
⌥ + → | Action: Move end of selection forward > Move by character
⌥ + ⇧ + ← | Action: Move start of selection back > Move by word
⌥ + ⇧ + → | Action: Move end of selection forward > Move by word
your ⌘ C or ⌘ V will work to copy/paste these selections