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yarn (n.)

Old English gearn "spun fiber, spun wool," from Proto-Germanic *garnan (source also of Old Norse, Old High German, German garn, Middle Dutch gaern, Dutch garen "yarn"), from PIE root *ghere- "intestine, gut, entrail." The phrase to spin a yarn "to tell a story" is first attested 1812, from a sailors' expression, on notion of telling stories while engaged in sedentary work such as yarn-twisting.

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Definitions of yarn from WordNet
1
yarn (n.)
the act of giving an account describing incidents or a course of events;
Synonyms: narration / recital
yarn (n.)
a fine cord of twisted fibers (of cotton or silk or wool or nylon etc.) used in sewing and weaving;
Synonyms: thread
2
yarn (v.)
tell or spin a yarn;
From wordnet.princeton.edu