1896, "aggressive, exuberant, touchy," American English, with -y (2) + feist "small dog," earlier fice, fist (American English, 1805); short for fysting curre "stinking cur," attested from 1520s, with present participle of now-obsolete Middle English fysten, fisten "break wind" (mid-15c.), from Proto-Germanic *fistiz "a fart," said to be from PIE *pezd- (see fart), but there are difficulties.
The 1811 slang dictionary defines fice as "a small windy escape backwards, more obvious to the nose than ears; frequently by old ladies charged on their lap-dogs." Compare also Danish fise "to blow, to fart," and obsolete English aske-fise, "fire-tender," literally "ash-blower" (early 15c.), from an unrecorded Norse source, used in Middle English for a kind of bellows, but originally "a term of reproach among northern nations for an unwarlike fellow who stayed at home in the chimney corner" [OED].