c. 1600, from Irish lupracan, metathesis of Old Irish luchorpan, which traditionally is explained as literally "a very small body," from lu "little, small" (from PIE root *legwh- "not heavy, having little weight") + corpan, diminutive of corp "body," from Latin corpus "body" (from PIE root *kwrep- "body, form, appearance"). However, Celtic linguistic scholarship has recently found a different explanation and connected the word to Latin Lupercalia:
New research by Simon Rodway, Michael Clarke and Jacopo Bisagni, published in the journal Cambrian Medieval Celtic Studies, traces them back to the Roman Luperci. The Luperci were bands of aristocratic youths who ran naked through ancient Rome in the festival of Lupercalia on the 15 February. In the fifth century A.D. St Augustine of Hippo compared the Luperci with the Greek werewolves who were believed to change from men into wolves by swimming through a lake in Arcadia. Two centuries later Irish scholars misunderstood Augustine. They thought he meant that the Luperci were an ancient non-human race. Because they could swim they were supposed to have survived Noah's Flood and taken refuge in Ireland. So in medieval Irish legends the leprechauns or 'little Luperci' still lived under water. The wolf connection was soon forgotten and eventually the 'little Lupercus' became the familiar land-dwelling leprechaun of modern Irish folklore and tourism. [Patrick Sims-Williams, Professor of Celtic Studies in Aberystwyth University, Wales, cited at Languagelog]
Commonly spelled lubrican in 17c. English; "Century Dictionary" (1902) has it under leprechawn. Variant leithbragan probably is Irish folk etymology, from leith "half" + brog "brogue," because the spirit was "supposed to be always employed in making or mending a single shoe."