Fancy is a 15th-century contraction of fantasy or phantasy. Fantasy comes from Old French phantasie, fantasie “imagination, imaginative faculty, a work of the imagination,” which in turn comes from Late Latin phantasia “idea, notion, fancy, imagined experience or set of circumstances, mere fancy or semblance.” In the Vulgate (the Latin version of the Bible, prepared chiefly by Saint Jerome at the end of the 4th century), phantasia also means “apparition, phantom.”
The original meaning of fancy, “individual preference or liking, arbitrary inclination,” as in “to take a fancy to someone,” was only one of several meanings of Middle English fantasie, a technical word in the psychology of scholasticism (the system of theological and philosophical teaching and disputation predominant in the Middle Ages, based chiefly upon the authority of the Bible, of the church fathers, and of Aristotle and his pagan, Christian, Muslim, and Jewish commentators).
The adjective fancy, meaning “fine, ornamental,” did not appear until 1753; it developed from attributive use of the noun in the sense “designed to please the taste or fancy.”

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