early 15c., "confirmation or enactment of a law," from Latin sanctionem (nominative sanctio) "act of decreeing or ordaining," also "decree, ordinance," noun of action from past-participle stem of sancire "to decree, confirm, ratify, make sacred" (see saint (n.)). Originally especially of ecclesiastical decrees.
1778, "confirm by sanction, make valid or binding;" 1797 as "to permit authoritatively;" from sanction (n.). Seemingly contradictory meaning "impose a penalty on" is from 1956 but is rooted in an old legalistic sense of the noun. Related: Sanctioned; sanctioning.