early 15c., "confirmation or enactment of a law," from Latin sanctionem (nominative sanctio) "act of decreeing or ordaining," also "decree, ordinance," noun of action from past participle stem of sancire "to decree, confirm, ratify, make sacred" (see saint (n.)). Originally especially of ecclesiastical decrees.
1778, "confirm by sanction, make valid or binding;" 1797 as "to permit authoritatively;" from sanction (n.). Seemingly contradictory meaning "impose a penalty on" is from 1956 but is rooted in an old legalistic sense of the noun. Related: Sanctioned; sanctioning.