Old English bur "room, hut, dwelling, chamber," from Proto-Germanic *bowan (source also of Old Norse bur "chamber," Swedish bur "cage," Old Danish both "dwelling, stall," Old Saxon bur "a house; a cage," Old High German bur "dwelling, chamber," buan "to dwell," German Vogelbauer "cage" for a bird), from PIE root *bheue- "to be, exist, grow."
Modern spelling developed after mid-14c. Sense of "leafy arbor" (place closed in, shaded, or sheltered by trees) is first attested 1520s. Hence, too, Australia's bower-bird (1847), so called for the ornamented play-houses it builds.