1590s, "condition of being an occupant;" from occupant + abstract noun suffix -cy. Meaning "fact of occupying" is from 1833; that of "proportion of available space that is occupied" is attested by 1974.
occupation of a building without a certificate of occupancy is illegal
occlusion
occlusive
occult
occultation
occultism
occupancy
occupant
occupation
occupational
occupied
occupier