lag (v.) Look up lag at Dictionary.com
"move slowly, fail to keep pace," 1520s, earlier as a noun meaning "last person" (1510s), later also as an adjective, "slow, tardy, coming behind" (1550s, as in lag-mon "last man"). All are of uncertain relationship and origin, possibly from a Scandinavian source (compare Norwegian lagga "go slowly"), or some dialectal version of last, lack, or delay. Related: Lag; lagging.

The noun in the mechanical sense "retardation of movement" is from 1855. First record of lag time is from 1951.