1640s, "tilting match, playful tournament of knights in chariots or on horseback," from French carrousel "a tilting match," from Italian carusiello, possibly from carro "chariot," from Latin carrus "two-wheeled wagon" (see car). The modern meaning "merry-go-round" as an amusement ride is by 1895, though there are suggestions of such a thing earlier:
A new and rare invencon knowne by the name of the royalle carousell or tournament being framed and contrived with such engines as will not only afford great pleasure to us and our nobility in the sight thereof, but sufficient instruction to all such ingenious young gentlemen as desire to learne the art of perfect horsemanshipp. [letter of 1673]