late 14c., "ancient Roman settlement outside Italy," from Latin colonia "settled land, farm, landed estate," from colonus "husbandman, tenant farmer, settler in new land," from colere "to cultivate, to till; to inhabit; to frequent, practice, respect; tend, guard," from PIE root *kwel- (1) "revolve, move round; sojourn, dwell" (source also of Latin -cola "inhabitant"). Also used by the Romans to translate Greek apoikia "people from home."
In reference to modern situations, "company or body of people who migrate from their native country to cultivate and inhabit a new place while remaining subject to the mother country," attested from 1540s. Meaning "a country or district colonized" is by 1610s.