1798, from French silhouette, in reference to Étienne de Silhouette (1709-1767), French minister of finance in 1759. Usually said to be so called because it was an inexpensive way of making a likeness of someone, a derisive reference to Silhouette's petty economies to finance the Seven Years' War, which were unpopular among the nobility. But other theories are that it refers to his brief tenure in office, or the story that he decorated his chateau with such portraits.
Silhouette portraits were so called simply because they came into fashion in the year (1759) in which M. de Silhouette was minister. [A. Brachet, "An Etymological Dictionary of the French Language," transl. G.W. Kitchin, 1882]
Used of any sort of dark outline or shadow in profile from 1843. The verb is recorded from 1876, from the noun. The family name is a Frenchified form of a Basque surname; Arnaud de Silhouette, the finance minister's father, was from Biarritz in the French Basque country; the southern Basque form of the name would be Zuloeta or Zulueta, which contains the suffix -eta "abundance of" and zulo "hole" (possibly here meaning "cave").