1690s, "large room or apartment in a palace or great house," from French salon "reception room" (17c.), from Italian salone "large hall," from sala "hall," from a Germanic source (compare Old English sele, Middle English salle, Old Norse salr "hall," Old High German sal "hall, house," German Saal), from Proto-Germanic *salaz.
This is reconstructed to be from a PIE *sel- (1) "human settlement" (source also of Old Church Slavonic selo "courtyard, village," obsolete Polish siolo, Russian selo "village," Lithuanian sala "village."
The sense of "reception room of a Parisian lady" is by 1810 (the woman who hosts one is a salonnière). The meaning "gathering of fashionable people" is by 1888; the meaning "annual exhibition of contemporary paintings and sculpture in Paris" (1875) is from its originally being held in one of the salons of the Louvre, from a secondary sense of the French word, "spacious or elegant apartment for reception of company or artistic exhibitions." Meaning "establishment for hairdressing and beauty care" is by 1913.