1900, coined by U.S. author L. Frank Baum (1856-1919) in "The Wonderful Wizard of Oz." He never explained how he got the word.
The word most like it is perhaps mutchkin, an old Scottish measure of capacity for liquids, which was used by Scott. (It comes from Middle Dutch mutseken, originally "a little cap," from mutse "cap," earlier almutse "amice, hood, headdress," from Latin amictus "mantle, cloak," noun use of past participle of amicire "to wrap, throw around," a compound from ambi- "around" (see ambi-) + iacere "to throw" (see jet (v.)).
But some Baum scholars see a possible inspiration in Münchner Kindl, the name of the emblem of the city of Munich (German München) or in German Männchen, literally "little man," which is cognate with mannequin.
While she stood looking at the strange and beautiful sights, she noticed coming toward her a group of the queerest people she had ever seen. They were not as big as the grown folk she had always been used to; but neither were they very small. In fact, they seemed about as tall as Dorothy, who was a well-grown child for her age, although they were, so far as looks go, many years older. ["The Wonderful Wizard of Oz"]