"small flute sounding an octave higher than the ordinary flute," 1830, from piccolo flute (1809), from French piccolo, from Italian flauto piccolo "small flute," from piccolo "small," perhaps a children's made-up word, or from picca "point," or from Vulgar Latin root *pikk- "little," related to *piccare "to pierce" (see pike (n.1)). Other sources suggest it is from the same source as French petit (see petit (adj.)).
The Octave Flute is frequently miscalled a Piccolo, whereas it is merely an octave higher in pitch than the concert flute, and is very effective in brilliant full pieces. ["On Flutes and Piccolos," in The Harmonicon, 1830]