Old English sciell, scill, Anglian scell "seashell, eggshell," related to Old English scealu "shell, husk," from Proto-Germanic *skaljo "piece cut off; shell; scale" (source also of West Frisian skyl "peel, rind," Middle Low German schelle "pod, rind, egg shell," Gothic skalja "tile"), with the shared notion of "covering that splits off," from PIE root *skel- (1) "to cut." Italian scaglia "chip" is from Germanic.
Sense of "mere exterior" is from 1650s; that of "hollow framework" is from 1791. Meaning "structure for a band or orchestra" is attested from 1938. Military use (1640s) was first of hand grenades, in reference to the metal case in which the gunpowder and shot were mixed; the notion is of a "hollow object" filled with explosives. Hence shell shock, first recorded 1915. Shell game "a swindle" is from 1890, from a version of three-card monte played with a pea and walnut shells.
1560s, "to remove (a nut, etc.) from a shell," from shell (n.). The meaning "to bombard with shells" is first attested 1856. To shell out "disburse" (1801) is a figurative use from the image of extracting nuts. Related: Shelled; shelling.