whitish metal element, 1755, the name was coined in 1754 by Swedish mineralogist Axel von Cronstedt (1722-1765) from shortening of Swedish kopparnickel "copper-colored ore" (from which it was first obtained), a half-translation of German Kupfernickel, literally "copper demon," from Kupfer (see copper) + Nickel "demon, goblin, rascal" (a pet form of masc. proper name Nikolaus (compare English Old Nick "the devil;" see Nicholas). According to OED, the ore was so called by miners because it looked like copper but yielded none.
Meaning "coin made partly of nickel" is from 1857, when the U.S. introduced one-cent coins made of nickel to replace the old bulky copper pennies. Application to five-cent piece (originally one part nickel, three parts copper) is from 1883; in earlier circulation there were silver half-dimes. To nickel-and-dime (someone) "make or keep (someone) poor by accumulation of trifling expenses," is by from 1964 (nickels and dimes "very small amounts of money" is attested from 1893).