Middle English, representing the merger or mutual influence of two words, one from Old English, one from an Old French form of the same Germanic word, and both ultimately from a PIE root meaning "cattle."
The Old English word is feoh "livestock, cattle; movable property; possessions in livestock, goods, or money; riches, treasure, wealth; money as a medium of exchange or payment," from Proto-Germanic *fehu (source also of Old Saxon fehu, Old High German fihu, German Vieh "cattle," Gothic faihu "money, fortune"). This is from PIE *peku- "cattle" (source also of Sanskrit pasu, Lithuanian pekus "cattle;" Latin pecu "cattle," pecunia "money, property").
The other word is Anglo-French fee, from Old French fieu, a variant of fief "possession, holding, domain; feudal duties, payment" (see fief), which apparently is a Germanic compound in which the first element is cognate with Old English feoh.
Via Anglo-French come the legal senses "estate in land or tenements held on condition of feudal homage; land, property, possession" (c. 1300). Hence fee-simple (late 14c.) "absolute ownership," as opposed to fee-tail (early 15c.) "entailed ownership," inheritance limited to some particular class of heirs (second element from Old French taillir "to cut, to limit").
The feudal sense was extended from landholdings to inheritable offices of service to a feudal lord (late 14c.; in Anglo-French late 13c.), for example forester of fe "a forester by heritable right." As these often were offices of profit, the word came to be used for "remuneration for service in office" (late 14c.), hence, "payment for (any kind of) work or services" (late 14c.). From late 14c. as "a sum paid for a privilege" (originally admission to a guild); early 15c. as "money payment or charge exacted for a licence, etc."
mid-13c., "property" of any kind, including money, land, income; from Anglo-French catel "property" (Old North French catel, Old French chatel), from Medieval Latin capitale "property, stock," noun use of neuter of Latin adjective capitalis "principal, chief," literally "of the head," from caput (genitive capitis) "head" (from PIE root *kaput- "head"). Compare sense development of fee, pecuniary.
in later Middle English especially "movable property, livestock" (early 14c.), including horses, sheep, asses, etc.; it began to be limited to "cows and bulls" from late 16c.
c. 1500, "consisting of money;" 1620s, "relating to money," from Latin pecuniarius "pertaining to money," from pecunia "money, property, wealth," from pecu "cattle, flock," from PIE root *peku- "wealth, movable property, livestock" (source of Sanskrit pasu- "cattle," Gothic faihu "money, fortune," Old English feoh "cattle, money").
Livestock was the measure of wealth in the ancient world, and Rome was essentially a farmer's community. That pecunia was literally "wealth in cattle" was still apparent to Cicero. For a possible parallel sense development in Old English, see fee, and compare, evolving in the other direction, cattle. Compare also Welsh tlws "jewel," cognate with Irish tlus "cattle," connected via the notion of "valuable thing," and, perhaps emolument.
An earlier adjective in English was pecunier (early 15c.; mid-14c. in Anglo-French), from Old French; also pecunial (late 14c.).
1610s, "a person's wealth," from Medieval Latin capitale "stock, property," noun use of neuter of Latin capitalis "capital, chief, first" (see capital (adj.)). From 1640s as "the wealth employed in carrying on a particular business," then, in a broader sense in political economy, "that part of the produce of industry which is available for further production" (1793).
[The term capital] made its first appearance in medieval Latin as an adjective capitalis (from caput, head) modifying the word pars, to designate the principal sum of a money loan. The principal part of a loan was contrasted with the "usury"—later called interest—the payment made to the lender in addition to the return of the sum lent. This usage, unknown to classical Latin, had become common by the thirteenth century and possibly had begun as early as 1100 A.D., in the first chartered towns of Europe. [Frank A. Fetter, "Reformulation of the Concepts of Capital and Income in Economics and Accounting," 1937, in "Capital, Interest, & Rent," 1977]
Also see cattle, and compare sense development of fee, and pecuniary. Middle English had chief money "principal fund" (mid-14c.). The noun use of the adjective in classical Latin meant "a capital crime."
"companion, comrade," c. 1200, from Old English feolaga "partner, one who shares with another," from Old Norse felagi, from fe "money" (see fee) + lag, from Proto-Germanic *lagam, from PIE root *legh- "to lie down, lay." The etymological sense of fellow seems to be "one who puts down money with another in a joint venture."
Meaning "one of the same kind" is from early 13c.; that of "one of a pair" is from c. 1300. Used familiarly since mid-15c. for "any man, male person," but not etymologically masculine (it is used of women, for example, in Judges xi.37 in the King James version: "And she said unto her father, Let this thing be done for me: let me alone two months, that I may go up and down upon the mountains, and bewail my virginity, I and my fellows").
Its use can be contemptuous or dignified in English and American English, and at different times in its history, depending on who used it to whom, it has carried a tinge of condescension or insult.
University senses (mid-15c., corresponding to Latin socius) evolved from notion of "one of the corporation who constitute a college" and who are paid from its revenues. Fellow well-met "boon companion" is from 1580s, hence hail-fellow-well-met as a figurative phrase for "on intimate terms."
In compounds, with a sense of "co-, joint-," from 16c., and by 19c. also denoting "association with another." Hence fellow-traveler, 1610s in a literal sense but in 20c. with a specific extended sense of "one who sympathizes with the Communist movement but is not a party member" (1936, translating Russian poputchik).
Fellow-countrymen formerly was one of the phrases the British held up to mock the Americans for their ignorance, as it is redundant to say both, until they discovered it dates from the 1580s and was used by Byron and others.
[fee to secure services] mid-15c., "act of keeping for oneself, an authorized retention (of dues, etc.)," an agent noun from retain (v.), or perhaps from or influenced by French retenir, infinitive used as a noun. Meaning "a retaining fee, fee paid to an attorney or barrister to secure his services" is from 1818. The general sense of "sum paid to secure special services" is from 1859.