1816, "mark off from adjoining lands or territory," a back-formation from demarcation. Figurative sense of "determine the relative limits of" is by 1858. Related: Demarcated; demarcating. The older verb is demark.
"act of marking off limits or boundaries," 1737, from Spanish linea de demarcacion or Portuguese linha de demarcaçao, name of the line laid down by Pope Alexander VI on May 4, 1493, dividing the New World between Spain and Portugal on a line 100 leagues west of the Cape Verde Islands. Applied from 1801 to other lines dividing regions. From Spanish de- (see de-) + marcar "to mark the boundaries of," from a Germanic source (see mark (n.1)).