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demerit (n.)

late 14c., "that which is censurable, wrong-doing, an offense, a crime," from Old French desmerite "blame, demerit" (Modern French démérite), from des- "not, opposite" (see dis-) + merite "merit" (see merit (n.)) or from Latin demeritum "fault," from past-participle stem of demereri "to merit, deserve," from de- in its completive sense.

Both senses, "that which one deserves," whether good or bad, existed in the French and Middle English words. The positive sense in English faded mid-17c. Meaning "penalty point in school" is by 1862, short for demerit mark.

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Definitions of demerit from WordNet

demerit (n.)
a mark against a person for misconduct or failure; usually given in school or armed forces;
ten demerits and he loses his privileges
demerit (n.)
the quality of being inadequate or falling short of perfection;
they discussed the merits and demerits of her novel
Synonyms: fault
From wordnet.princeton.edu