also cony, "rabbit," c. 1200, abstracted from Anglo-French conis, Old French coniz, plurals of conil "long-eared rabbit" (Lepus cunicula) from Latin cuniculus (source of Spanish conejo, Portuguese coelho, Italian coniglio), the small, Spanish variant of the Italian hare (Latin lepus). The word perhaps is from Iberian Celtic (classical writers say it is Hispanic).
Middle English had two forms: cony, conny, also coning, cunin, conyng; Old French had conil alongside conin. Apparently the plural form conis (from conil, with the -l- elided) was taken into English and regularly single-ized as cony. The Old French form in -n was borrowed in Dutch (konijn) and German (Kaninchen, a diminutive), and is preserved in the surname Cunningham (from a place-name in Ayrshire). Rabbits not being native to northern Europe, there was no Germanic word for them.
Rabbit arose 14c. to mean the young of the species, but gradually pushed out the older word 19c., after British slang picked up coney as a punning synonym for cunny "cunt" (compare connyfogle "to deceive (a woman) in order to win sexual favors"). The word was in the King James Bible (Proverbs xxx.26, etc.), however, so it couldn't be entirely dropped, and the solution was to change the pronunciation of the original short vowel (rhyming with honey, money) to rhyme with bony, stony. In the Old Testament, the word translates Hebrew shaphan "rock-badger."
Association with "cheating" is from coney-catcher, "A term made famous by [Robert] Greene in 1591, and in great vogue for 60 years after" [OED]
CONY-CATCHER. A sharper, or cheat. Minshew has well expressed the origin of the term: A conie-catcher, a name given to deceivers, by a metaphor, taken from those that rob warrens, and conie-grounds, using all means, sleights, and cunning to deceive them, as pitching of haies before their holes, fetching them in by tumblers, &c. [Nares, "Glossary"]
Also 16c.-17c. a term of endearment for a woman. Coney-wool (1714) "fur of rabbits" formerly was much used in making hats, etc. Coney-hole "rabbit hole" is from mid-15c.
by 1830, "to cheat, deceive," in an English collection of Irish songs, and also used, punningly, in the lines of an Englishman character in a "grand dramatic melodrama" set in India: "There, thanks to my canoe—we've canoodled those Bramins nicely, and effected a clear retreat to my retreat here." ["The Cataract of the Ganges, or The Rajah's Daughter" by W.T. Moncrieff].
It is used in New Orleans by 1843, also as a noun, "hanky-panky, illicit procedure." After 1848, canoodling or cahoodling turns up in Southern U.S. newspapers with a sense of "political manipulation, back-room deals:
The truth is, while cahoodling at the top of his bent for Taylor, to the friends of the other candidates he professed unalterable devotion to the fortunes of the favorite of each." [North Carolina Standard (Raleigh), June 28, 1848, in an account of political doings from Washington]
Very clever canoodling, this! [North Carolina Times (Raleigh), July 1, 1848, in reference to the sectional wrangling over the Wilmot Proviso.]
Canoodling is frequent in certain North Carolina papers through the 1870s. The Standard (July 12, 1866) writes of cohooting and canoodling.
The Washington (D.C.) Evening Star also used it often from 1854, in columns widely reprinted in the Southern press, but as cahoodling, also, at least once cohoodling [Sept. 29, 1858]. It defines "the cahoodling line" as "those in Washington interested in securing places at a distance for their respective friends" [Sept. 9, 1854].
The word seemed to require explanation when it appeared in the northern press. From A Chicago Tribune account (Dec. 14, 1859) from a D.C. correspondent of the fight over Speaker of the House:
He also handed to the Clerk a letter from Douglas denying that Greeley and he ever "cahoodled" in his (Douglas') parlor, or secure his re-election.
It is spelled canoedle in a Pennsylvania paper [Lebanon Daily News, Oct. 17, 1874], but this might have been for humorous effect, as it is in a mock letter to a would-be candidate ("You canoedling unculinary old cucumber, shut up ; you have no chance for Congress, and Cherrington says you are not fit to watch his fish ponds.")
The sense shift toward "to indulge in caresses and fondling endearments" [OED] is attested by 1860s; W.S. Fortey published in an English songbook "And he Said my Dear Maid will you Marry Me?" a woman's comical lament about her wooer:
But he wanted to kiss and canoodle me
So I wouldn't allow it at all!
What is evidently a reworking of the "Ganges" play from 1866 uses canoodling in a way suggestive of fond caressing. [The Western Times, Exeter, Dec. 28, 1866]. Another early use is in Trewman's Exeter Flying Post for Feb. 18, 1874. The newspaper's account of the Cullompton petty session of two days previous includes the case of a young fellow charged with "being on the premises of Mr. R. M. Dawdney, of Pound Down Farm, Silverton, for an unlawful purpose," viz. to spoon with his sweetheart, Dawdney's servant girl, "in the small hours of the morning."
The defendant was directed to pay the expenses and he left the court with the evident impression that "canoodling" by night was sometimes attended with unpleasant results.
In 1869 W.S. Gilbert published "The King of Canoodle-Dum," one of his popular, buffoonish "Bab Ballads." It concerns an English sailor shipwrecked in the West Indies who is taken up by said native "king" and given a life of tropical luxury. Thanks probably to the song, Canoodle-dum seems to have had some currency in England in the 1870s, referring vaguely to peoples in Africa or the Caribbean.