Etymology
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penalize (v.)

1868, in sports, "to disadvantage one competitor for a breach of the rules," from penal + -ize. The meaning "to make or declare (an action) legally punishable" is by 1879. Related: Penalized; penalizing; penalization.

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Definitions of penalize

penalize (v.)
impose a penalty on; inflict punishment on;
The students were penalized for showing up late for class
Synonyms: punish / penalise
From wordnet.princeton.edu