a fusion of Old English hon "suspend" (transitive, class VII strong verb; past tense heng, past participle hangen), and Old English hangian "be suspended" (intransitive, weak, past tense hangode); also probably influenced by Old Norse hengja "suspend," and hanga "be suspended." All from Proto-Germanic *hanhan (transitive), *hanganan (intransitive) "to hang" (source also of Old Frisian hangia, Dutch hangen, German hängen), from PIE *konk- "to hang" (source also of Gothic hahan, Hittite gang- "to hang," Sanskrit sankate "wavers," Latin cunctari "to delay;" see also second element in Stonehenge).
As a method of execution, in late Old English (but originally specifically of crucifixion). Meaning "to come to a standstill" (especially in hung jury) is from 1848, American English. Hung emerged as past participle 16c. in northern England dialect, and hanged endured only in legal language (which tends to be conservative) in reference to capital punishment and in metaphors extended from it (I'll be hanged).
Teen slang sense of "spend time" first recorded 1951; hang around "idle, loiter" is from 1828, American English; also compare hang out. To hang back "be reluctant to proceed" is from 1580s; phrase hang an arse "hesitate, hold back" is from 1590s. Verbal phrase hang fire (1781) originally was used of guns that were slow in communicating the fire through the vent to the charge. To let it all hang out "be relaxed and uninhibited" is from 1967.