12c., a shortening of Old English ic, the first person singular nominative pronoun, from Proto-Germanic *ek (source also of Old Frisian ik, Old Norse ek, Norwegian eg, Danish jeg, Old High German ih, German ich, Gothic ik), from PIE *eg- "I," nominative form of the first person singular pronoun (source also of Sanskrit aham, Hittite uk, Latin ego (source of French Je), Greek ego, Russian ja, Lithuanian aš).
Reduced to i by mid-12c. in northern England, later everywhere; the form ich or ik, especially before vowels, lingered in northern England until c. 1400 and survived in southern dialects until 18c. It began to be capitalized mid-13c. to mark it as a distinct word and avoid misreading in handwritten manuscripts.
The reason for writing I is ... the orthographic habit in the middle ages of using a 'long i' (that is, j or I) whenever the letter was isolated or formed the last letter of a group; the numeral 'one' was written j or I (and three iij, etc.), just as much as the pronoun. [Otto Jespersen, "Growth and Structure of the English Language," p.233]
The dot on the "small" letter -i- began to appear in 11c. Latin manuscripts to distinguish the letter from the stroke of another letter (such as -m- or -n-). Originally a diacritic, it was reduced to a dot with the introduction of Roman type fonts. The letter -y- also was written with a top dot in Old English and early Middle English, during the centuries when -i- tended to be written with a closed loop at the top and thus was almost indistinguishable from the lower-case thorn (þ). In names of U.S. highways (by 1966) it is short for Interstate (adj.).
The Greek equivalent is -o-, which also became an active connective in English, but they now are used indifferently with elements from either language.
In paraphernalia, Mammalia, regalia, etc. it represents Latin or Greek -a (see -a (2)), plural suffix of nouns in -ium (Latin) or -ion (Greek), with formative or euphonic -i-.
in prosody, a foot of two syllables, the first short or unaccented, the second long or accented, 1842, from French iambe (16c.) or directly from Latin iambus "an iambic foot; an iambic poem," from Greek iambos "metrical foot of one unaccented followed by one accented syllable" (see iambic). Iambus itself was used in English in this sense from 1580s. In Greek, the measure was said to have been first used by satiric writers.
[The Iambus] is formed constantly by the proper accentuation of familiar, but dignified, conversational language, either in Greek or English : it is the dramatic metre in both, and in English, the Epic also. When the softened or passionate syllables of Italian replace the Latin resoluteness, it enters the measure of Dante, with a peculiar quietness and lightness of accent which distinguish it, there, wholly from the Greek and English Iambus. [Ruskin, "Elements of English Prosody, for use in St. George's Schools," 1880]
in prosody, 1570s (n.) "a foot of two syllables, the first short or unaccented, the second long or accented;" 1580s (adj.), "pertaining to or employing iambs," from Late Latin iambicus, from Greek iambikos, from iambos "metrical foot of one unaccented followed by one accented syllable; an iambic verse or poem," traditionally said to be from iaptein "to assail, attack" (in words), literally "to put forth, send forth" (in reference to missiles, etc.), but Beekes says "doubtless of Pre-Greek origin."
The meter of invective and lampoon in classical Greek since it was first used 7c. B.C.E. by Archilochus, whose tomb, Gaetulicus says, is haunted by wasps; iambics of various length formed the bulk of all English poetry before 20c. and a great deal since. The iambic of classical Greek and Latin poetry was quantitative.