1814, "crush with the teeth," a variant of craunch (1630s), which probably is of imitative origin. Meaning "act or proceed with a sound of crunching" is by 1849. Related: Crunched; crunching.
The noun is 1836, "an act of crunching," from the verb; the sense of "critical moment" was popularized 1939 by Winston Churchill, who had used it in his 1938 biography of Marlborough.