late 14c., nerve, nerf, "sinew, tendon, hard cord of the body" (a sense now obsolete), also "fiber or bundle of fibers that convey the capacity to feel or move from the brain or spinal cord to the body," from Old French nerf and directly from Medieval Latin nervus "a nerve," from Latin nervus "sinew, tendon; cord, bowstring, string of a musical instrument," metathesis of pre-Latin *neuros, from PIE *(s)neu- "tendon, sinew" (source also of Sanskrit snavan- "band, sinew," Armenian neard "sinew," Greek neuron "sinew, tendon," in Galen "nerve").
The late medieval surgeons understood the nature and function of the nerves and often used nervus to denote a `nerve' in the modern sense, as well as to denote a `tendon'. There appears to have been some confusion, however, between nerves and tendons; hence, a number of instances in which nervus may be interpreted in either way or in both ways simultaneously. [Middle English Compendium]
The secondary senses developed from meaning "strength, vigor; force, energy" (c. 1600), from the "sinew" sense. Hence the non-scientific sense with reference to feeling or courage, first attested c. 1600 (as in nerves of steel, 1869) and that of "coolness in the face of danger, fortitude under trying or critical circumstances" is by 1809. The bad sense "impudence, boldness, cheek" (originally slang) is by 1887. Latin nervus also had a figurative sense of "vigor, force, power, strength," as did Greek neuron. From the neurological sense come Nerves "condition of hysterical nervousness," attested by 1890, perhaps from 1792. To get on (someone's) nerves is from 1895. War of nerves "psychological warfare" is from 1915.