1550s, figurative, "to weaken, remove the strength or force of," from Latin dilutus, past participle of diluere "dissolve, wash away, dilute," from dis- "apart" (see dis-) + -luere, combining form of lavere "to wash" (from PIE root *leue- "to wash").
Literal sense of "render more liquid, make more thin or fluid; weaken by admixture of water or other liquid" is from 1660s. Related: Diluted; diluting. As an adjective, "thin, attenuated, reduced in strength," from c. 1600.