1590s, "condition of being logically dependent; relation of a thing or person to that by which it is supported;" 1610s, "that which depends for its existence upon something else;" see dependent + -cy. Originally also dependancy, on the French model, but the Latinate form gradually pushed this into disuse; see -ance and compare dependant (n.). Meaning "territory subordinate to another nation" is recorded from 1680s.
1620s, "to settle with colonists, plant or establish a colony in," from stem of Latin colonus "tiller of the soil, farmer" (see colony). From 1630s as "to migrate to and settle in." It is attested by 1790s in the sense of "to make another place into a national dependency" without regard for settlement there (such as in reference to French activity in Egypt or the British in India), and in this sense it is probably directly from colony.
No principle ought ever to be tolerated or acted upon, that does not proceed on the basis of India being considered as the temporary residence of a great British Establishment, for the good government of the country, upon steady and uniform principles, and of a large British factory, for the beneficial management of its trade, upon rules applicable to the state and manners of the country. [Henry Dundas, Chairman of the East-India Company, letter, April 2, 1800]
Related: Colonized; colonizing.