1590s, "bewitch, enchant," from French fasciner (14c.), from Latin fascinatus, past participle of fascinare "bewitch, enchant, fascinate," from fascinus "a charm, enchantment, spell, witchcraft," which is of uncertain origin. Earliest used of witches and of serpents, who were said to be able to cast a spell by a look that rendered one unable to move or resist. Sense of "delight, attract and hold the attention of" is first recorded 1815.
To fascinate is to bring under a spell, as by the power of the eye; to enchant and to charm are to bring under a spell by some more subtle and mysterious power. This difference in the literal affects also the figurative senses. [Century Dictionary]
Possibly from Greek baskanos "slander, envy, malice," later "witchcraft, sorcerery," with form influenced by Latin fari "speak" (see fame (n.)), but others say the resemblance of the Latin and Greek words is accidental. The Greek word might be from a Thracian equivalent of Greek phaskein "to say;" compare enchant, and German besprechen "to charm," from sprechen "to speak." Watkins suggests the Latin word is perhaps from PIE *bhasko- "band, bundle" via a connecting sense of "amulet in the form of a phallus" (compare Latin fascinum "human penis; artificial phallus; dildo"). Related: Fascinated; fascinating.
If [baskanos] and fascinum are indeed related, they would point to a meaning 'curse, spell' in a loanword from an unknown third language. [de Vaan]
c. 1600, "act of bewitching," from Latin fascinationem (nominative fascinatio), noun of action from past-participle stem of fascinare "bewitch, enchant" (see fascinate). Meaning "state of being fascinated" is from 1650s; that of "fascinating quality, attractive influence upon the attention" is from 1690s.
"artificial penis used for female gratification," 1590s, a word of unknown origin. Traditional guesses include a corruption of Italian deletto "delight" (from Latin dilectio, noun of action from diligere "to esteem highly, to love;" see diligence) or a corruption of English diddle. None of these seems very convincing (Florio's dictionary glosses many words with dildo, but diletto is not one of them.) Century Dictionary perhaps gets closer to the mark:
A term of obscure cant or slang origin, used in old ballads and plays as a mere refrain or nonsense-word; also used, from its vagueness, as a substitute for various obscene terms and in various obscene meanings. 
The earliest use of the word in this sense, and probably the start of its popularity, seems to be via Nashe:
"Curse Eunuke dilldo, senceless counterfet" ["Choise of Valentines or the Merie Ballad of Nash his Dildo," T. Nashe, c. 1593]
Other early forms include dildoides (1675), dildidoes (1607). Middle English had dillidoun (n.) "a darling, a pet" (mid-15c.), from Old Norse dilla "to lull" (hence dillindo "lullaby"). That sense probably survived into Elizabethan times, if it is the word in Jonson's "Cynthia's Revels":
Chorus: Good Mercury defend vs.
Phan.: From perfum'd Dogs, Monkeys, Sparrowes, Dildos, and Parachitos.
And dildin seems to be a term for "sweetheart" in a 1675 play:
Mir.: Here comes a lusty Wooer, my dildin, my darling.
Here comes a lusty Wooer Lady bright and shining.
The thing itself is older. A classical Latin word for one was fascinum (see fascinate). In later English sometimes a French word, godemiché, was used (1879). Also used in 18c. of things that resemble dildoes, e.g. dildo pear (1756), dildo cactus (1792).
Shakespeare plays on the double sense, sexual toy and ballad refrain, in "A Winter's Tale."
SERVANT: He hath songs for man or woman, of all sizes; no
milliner can so fit his customers with gloves: he
has the prettiest love-songs for maids; so without
bawdry, which is strange; with such delicate
burthens of dildos and fadings, 'jump her and thump
her;' and where some stretch-mouthed rascal would,
as it were, mean mischief and break a foul gap into
the matter, he makes the maid to answer 'Whoop, do me
no harm, good man;' puts him off, slights him, with
'Whoop, do me no harm, good man.'
late 14c., literal ("practice sorcery or witchcraft on") and figurative ("delight in a high degree, charm, fascinate"), from Old French enchanter "bewitch, charm, cast a spell" (12c.), from Latin incantare "to enchant, fix a spell upon," from in- "upon, into" (from PIE root *en "in") + cantare "to sing" (from PIE root *kan- "to sing"). Or perhaps a back-formation from enchantment.
in the figurative sense "wildly irresponsible person, potent person or thing freed from usual restraint," by 1896; in the literal sense an object of dread on old warships; the figurative use probably arose from a celebrated scene in a popular late novel by Victor Hugo:
You can reason with a bull dog, astonish a bull, fascinate a boa, frighten a tiger, soften a lion; no resource with such a monster as a loose cannon. You cannot kill it, it is dead; and at the same time it lives. It lives with a sinister life which comes from the infinite. It is moved by the ship, which is moved by the sea, which is moved by the wind. This exterminator is a plaything. [Victor Hugo, "Ninety Three," 1874]