early 15c., "sundial, instrument for indicating the hour of the day by means of a shadow thrown upon a graduated surface," earlier "dial of a compass" (mid-14c.), from Old French dyal, apparently from Medieval Latin dialis "daily," from Latin dies "day," from PIE root *dyeu- "to shine." The word perhaps was abstracted from a phrase such as Medieval Latin rota dialis "daily wheel."
It evolved to mean any round plate or face over which a pointer moves to indicate something about the machinery to which it is attached. Sense of "face of a clock (or later a watch), upon which hours and minutes are marked and over which the hands move" is from mid-15c.
Telephone sense "circular plate marked with numbers and letters which can be rotated to establish connection" is from 1879, which led to dial tone (1921), "the signal to begin dialing." Dial-plate is attested from 1680s.
1650s, "to work with aid of a dial or compass; measure with or as with a dial," from dial (n.). Sense of "rotate the dial plate of a telephone to indicate the number to which a connection is to be established" is from 1921. Related: Dialed; dialing.