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policy (n.1)

"way of management," late 14c., policie, "study or practice of government; good government;" from Old French policie (14c.) "political organization, civil administration," from Late Latin politia "the state, civil administration," from Greek politeia "state, administration, government, citizenship," from polites "citizen," from polis "city, state" (see polis). Meaning "plan of action, way of management" first recorded c. 1400.

Origin and meaning of policy

policy (n.2)

"written insurance agreement," 1560s, from Middle French police "contract, bill of lading" (late 14c.), from Italian polizza "written evidence of a transaction," from Old Italian poliza, from Medieval Latin apodissa "receipt for money," from Greek apodexis "proof, declaration," from apo- "off" + deiknynai "to show," cognate with Latin dicere "to say, speak" (from PIE root *deik- "to show," also "pronounce solemnly").

Origin and meaning of policy

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Definitions of policy from WordNet

policy (n.)
a plan of action adopted by an individual or social group;
it was a policy of retribution
policy (n.)
a line of argument rationalizing the course of action of a government;
policy (n.)
written contract or certificate of insurance;
you should have read the small print on your policy
Synonyms: insurance policy / insurance
From wordnet.princeton.edu