Old English lytel "not large, not much, small in size or number; short in distance or time; unimportant,"
from Proto-Germanic *lutilla- (source also of Old Saxon luttil, Dutch luttel, Old High German luzzil, German lützel "little"), perhaps originally a diminutive of the root of Old English lyt "little, few," from PIE *leud- "small."
"Often synonymous with small, but capable of emotional implications which small is not" [OED]. Now with less, least, but formerly and in dialect littler, littlest. In terms of endearment from 1560s. Meaning "younger" (of a brother, sister, etc.) is from 1610s. As an adverb, Old English lytel.
Little while "a short time" is from 12c. Phrase the little woman "wife" attested from 1795. Little people "the faeries" is from 1726; as "children" it is attested from 1752; as "ordinary people" (opposed to the great) from 1827. Little death "orgasm" (1932) translates French petite mort. Little Neck clams (1884) are so called for Little Neck, a "neck" of land on Long Island's North Shore, where they first came into favor. Little green men "space aliens" is from 1950. Little boys' room (or girls') as a euphemism for "lavatory" is from 1957. Little breeches for "boy" is by 1785. Little black dress is from 1939.
At the beginning of summer, smart women who stay in town like to wear sheer "little black dresses." Because most "little black dresses" look alike, retailers struggle each year to find something which will make them seem new. [Life magazine, June 13, 1939]
The word Adjusto-Lite for portable electric lamps was opposed by the user of a trade mark Auto-lite registered before the date of use claimed by the applicant. ["The Trade-Mark Reporter," 1922]
Coincidentally lite in Old English and early Middle English meant "few; little; not much;" see little (adj.), which is an extended form of it.
1540s, "awkward fellow, boor, bumpkin," of uncertain origin. Perhaps a noun from a dialectal survival of Middle English louten (v.) "bow down" (c. 1300), from Old English lutan "bow low," from Proto-Germanic *lut- "to bow, bend, stoop" (source also of Old Norse lutr "stooping," which itself might also be the source of the modern English word).
According to Watkins this is from PIE *leud- "to lurk" (source also of Gothic luton "to deceive," Old English lot "deceit), also "to be small" (see little). Non-Germanic cognates probably include Lithuanian liūdėti "to mourn;" Old Church Slavonic luditi "to deceive," ludu "foolish." Sense of "cad" is first attested 1857 in British schoolboy slang.