"weather condition consisting of a cloud resting upon the ground, fog," also "precipitation consisting of fine droplets of water, much smaller than rain," Old English mist (earliest in compounds, such as misthleoðu "misty cliffs," wælmist "mist of death"), from Proto-Germanic *mikhstaz (source also of Middle Low German mist, Dutch mist, Icelandic mistur, Norwegian and Swedish mist), perhaps from PIE *meigh- "to urinate." Greek omikhle "fog;" Old Church Slavonic migla"fog;" Sanskrit mih- "fog, mist," megha "cloud" sometimes are said to be cognates in this secondary sense, but Beekes finds these rather more likely to be from a separate IE root meaning "fog."
Sometimes distinguished from fog, either as being less opaque or as consisting of drops large enough to have a perceptible downward motion. [OED]
Also in Old English in reference to dimness of the eyes or eyesight, either by illness or tears, and in a figurative sense of "something that darkens and obscures mental vision." Meaning "haze of dust in the air producing obscurity of things seen at a distance" is by 1785.
Old English mistian "to become misty, to be or grow misty;" see mist (n.). Meaning "cover with or as with mist" is from early 15c. Related: Misted; misting.