late 14c., "action of compensating," from Latin compensationem (nominative compensatio) "a weighing one thing against another, a balancing," noun of action from past participle stem of compensare "to weigh one thing (against another)," thus, "to counterbalance," from com "with, together" (see com-) + pensare, frequentative of pendere "to hang, cause to hang; weigh; pay" (from PIE root *(s)pen-"to draw, stretch, spin").
Meaning "what is given in recompense" is from c. 1600; meaning "amends for loss or damages" is from 1804; meaning "salary, wages" is attested from 1787, American English. The psychological sense is from 1914.
"lose the ability to maintain compensation," 1912, probably a back-formation from decompensation. Related: Decompensated; decompensating.
late 14c., reparacioun, "repair, act of mending" (a sense now rare or obsolete), also "amends, compensation, recompense, satisfaction for injury, what is done to repair a wrong," from Old French reparacion and directly from Late Latin reparationem (nominative reparatio) "act of repairing, restoration," noun of action from past-participle stem of Latin reparare "restore, repair" (see repair (v.1)).
Reparations "compensation for war damaged owed by the aggressor" is attested from 1921, with reference to Germany, from French réparations (1919).