1590s, "to draw up a writing in chapters or articles" (i.e., under "headings"), in part a back-formation from capitulation (q.v.), in part from Medieval Latin capitulatus, past participle of capitulare "to draw up in heads or chapters," hence "arrange conditions," from capitulum "chapter," in classical Latin "heading," literally "a little head," diminutive of caput (genitive capitis) "head" (from PIE root *kaput- "head").
Often of terms of surrender, and thus it came to mean "to yield to an enemy on stipulated terms" (1680s). Related: Capitulated; capitulating. Compare chapter.