early 14c., from Anglo-French esquirel, Old French escurueil "squirrel; squirrel fur" (Modern French écureuil), from Vulgar Latin *scuriolus, diminutive of *scurius "squirrel," variant of Latin sciurus, from Greek skiouros "a squirrel," literally "shadow-tailed," from skia "shadow" (see Ascians) + oura "tail," from PIE root *ors- "buttocks, backside" (see arse). Perhaps the original notion is "that which makes a shade with its tail," but Beekes writes that this "looks like a folk etymology rather than a serious explanation." The Old English word was acweorna, which survived into Middle English as aquerne.
"to hoard up, store away" (as a squirrel does nuts), 1939, from squirrel (n.). Related: Squirreled; squirreling.