c. 1300, "a story, written or recited, of the adventures of a knight, hero, etc.," often one designed principally for entertainment," from Old French romanz "verse narrative" (Modern French roman), originally an adverb, "in the vernacular language," from Vulgar Latin *romanice scribere "to write in a Romance language" (one developed from Latin instead of Frankish), from Latin Romanicus "of or in the Roman style," from Romanus "Roman" (see Roman).
The sense evolution is because medieval vernacular tales usually told chivalric adventures full of marvelous incidents and heroic deeds. In reference to literary works, often in Middle English meaning ones written in French but also applied to native compositions. Literary sense extended by 1660s to "a love story." Meaning "adventurous quality" first recorded 1801; that of "love affair" is from 1916. Romance novel attested from 1964. Compare Romance (adj.).