"crazy, silly," 1916, slang, of unknown origin, perhaps connected to potter (v.), or to pot (n.1) in its association with alcoholic drinking. Earlier slang senses were "easy to manage" (1899) and "feeble, petty" (1860).
1942, child's word for "chamber pot," from pot (n.1). Potty-training is attested from 1944. Potty-mouth "one who uses obscene language" is student slang from 1968.
potty little details