late 13c., "crystallized sugar," from Old French çucre candi "sugar candy," ultimately from Arabic qandi, from Persian qand "cane sugar," probably from Sanskrit khanda "piece (of sugar)," perhaps from Dravidian (compare Tamil kantu "candy," kattu "to harden, condense").
The sense gradually broadened (especially in U.S.) to mean by late 19c. "any confection having sugar as its basis." In Britain these are sweets, and candy tends to be restricted to sweets made only from boiled sugar and striped in bright colors. A candy-pull (1865) was a gathering of young people for making (by pulling into the right consistency) and eating molasses candy.