Etymology
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principal (adj.)

c. 1300, "main, principal, chief, dominant, largest, greatest, most important;" also "great, large," from Old French principal "main, most important," of persons, "princely, high-ranking" (11c.) and directly from Latin principalis "first in importance; original, primitive," from princeps (genitive principis) "first man, chief leader; ruler, sovereign," noun use of adjective meaning "that takes first," from primus "first" (see prime (adj.)) + root of capere "to take" (from PIE root *kap- "to grasp"). 

principal (n.)

c. 1300, "chief man, leading representative," also "the most part, the main part;" also, in law, "one who takes a leading part or is primarily concerned in an action or proceeding;" from principal (adj.) or from or influenced by noun uses in Old French and Latin.

From mid-14c. as "ruler, governor;" 1827 as "person in charge of a public school," though the meaning "head of a college or hall" was in English from mid-15c. From early 15c. as "a main sum of money," hence "money on which interest is paid."  

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Definitions of principal
1
principal (n.)
the original amount of a debt on which interest is calculated;
principal (n.)
the educator who has executive authority for a school;
she sent unruly pupils to see the principal
Synonyms: school principal / head teacher / head
principal (n.)
an actor who plays a principal role;
Synonyms: star / lead
principal (n.)
capital as contrasted with the income derived from it;
Synonyms: corpus / principal sum
principal (n.)
(criminal law) any person involved in a criminal offense, regardless of whether the person profits from such involvement;
principal (n.)
the major party to a financial transaction at a stock exchange; buys and sells for his own account;
Synonyms: dealer
2
principal (adj.)
most important element;
the principal example
the principal rivers of America
Synonyms: chief / main / primary / master
From wordnet.princeton.edu