Old English þusend, from Proto-Germanic *thusundi (source also of Old Frisian thusend, Dutch duizend, Old High German dusunt, German tausend, Old Norse þusund, Gothic þusundi).
Related to words in Balto-Slavic (Lithuanian tukstantis, Old Church Slavonic tysashta, Polish tysiąc, Russian tysiacha, Czech tisic), and probably ultimately a compound with indefinite meaning "great multitude, several hundred," literally "swollen-hundred," with first element from PIE root *teue- "to swell," second element from PIE root *dekm- "ten."
Used to translate Greek khilias, Latin mille, hence the refinement into the precise modern meaning. There was no general Indo-European word for "thousand." Slang shortening thou first recorded 1867. Thousand island dressing (1916) presumably is named for the region of New York on the St. Lawrence River.
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