1560s, "to remove (a nut, etc.) from its shell," from shell (n.). The general sense of "remove or strip off the outer covering of" is by 1690s. It also can mean "enclose in a case" (1630s). The military meaning "bombard with shells" is attested by 1856. To shell out "disburse, hand over, deliver" (1801) is a figurative slang use from the image of extracting nuts. Related: Shelled; shelling.