1570s, "diseased, sickly" (a sense now obsolete); 1580s, "broken, impaired, full of cracks or flaws," from craze + -y (2). Meaning "deranged, demented, of unsound mind or behaving as so" is from 1610s. Jazz slang sense "cool, exciting" is attested by 1927. Related: Crazily; craziness.
To drive (someone) crazy is attested by 1873. To do something like crazy "with manic vigor or frequency" is by 1905. Phrase crazy like a fox has origins by 1935. Crazy Horse, name of the Teton Lakhota (Siouan) war leader (d. 1877), translates thašuka witko, literally "his horse is crazy." Crazy-quilt (1886) preserves the original "break to pieces" sense of craze (v.). Crazy bone as an alternative to funny bone is recorded by 1853.
"driving to distraction, crazy-making," 1743, present-participle adjective from madden. Related: Maddeningly.