1796 in the abstract metaphysical sense "belief that reality is made up only of ideas," from ideal (adj.) + -ism. Probably formed on model of French idéalisme. Meaning "tendency to represent things in an ideal form" is from 1829. Meaning "pursuit of the ideal, a striving after the perfect state" (of truth, purity, justice, etc.).
In the philosophical sense the Germans have refined it into absolute (Hegel), subjective (Fichte), objective (von Schelling), and transcendental (Kant).