1550s, "one who keeps a rule, custom, etc.," agent noun from observe. Meaning "one who watches and takes notice" is from 1580s; this is the sense of the word in many newspaper names. Meaning "one who observes without participating" (at a meeting, conference, etc.) is by 1925.
observation
observational
observative
observatory
observe
observer
obsess
obsessed
obsession
obsessive
obsidian