1630s, "covered chair on poles," possibly from a southern Italian dialect derivative of Italian sede "chair" (compare Italian seggietta, 1590s; the thing itself was said to have been introduced from Naples), from Latin sedes, related to sedere "to sit," from PIE root *sed- (1) "to sit." Since Johnson's conjecture, often derived from the town of Sedan in France, where it was said to have been made or first used, but historical evidence for this is lacking.
Introduced in England by Sir Sanders Duncombe in 1634 and first called a covered chair. "In Paris the sedan-chair man was usually an Auvergnat, in London an Irishman" ["Encyclopaedia Britannica," 1929]. Meaning "closed automobile seating four or more" first recorded 1912, American English.