late 13c., from Old French oncle, from Latin avunculus "mother's brother" ("father's brother" was patruus), literally "little grandfather," diminutive of avus "grandfather," from PIE root *awo- "grandfather, adult male relative other than one's father" (source also of Armenian hav "grandfather," Hittite huhhas "grandfather," Lithuanian avynas "maternal uncle," Old Church Slavonic uji "uncle," Welsh ewythr "uncle"). Boutkan, however, says "the root probably denoted members of the family of the mother."
Replaced Old English eam (usually maternal; paternal uncle was fædera), which represents the Germanic form of the same root (source also of Dutch oom "uncle, grandfather, brother-in-law," Old High German oheim "maternal uncle, son of a sister" German Ohm "uncle," Old Norse afi "grandfather").
Also from French are German, Danish, Swedish onkel. As a familiar title of address to an old man, attested by 1793; in the U.S. South, especially "a kindly title for a worthy old negro" [Century Dictionary]. First record of Dutch uncle (and his blunt, stern, benevolent advice) is from 1838; Welsh uncle (1747) was the male first cousin of one's parent. To say uncle as a sign of submission in a fight is North American, attested from 1909, of uncertain signification.