The word was invented because the right word was too hard. In September 1880, a priest and a journalist needed a name for a new tactic, and "ostracism" would not do.
Charles Cunningham Boycott was born in Norfolk in 1832. His family bought him a commission in the British Army's 39th Foot in 1850, and he sold it in 1853. He was nonetheless known as Captain Boycott. By 1880 he was land agent for Lord Erne at Lough Mask House in County Mayo. He collected rents and farmed on his own account.
That year, after a poor harvest, Lord Erne offered his tenants a 10 percent rent reduction. They asked for 25 percent and were refused, and Boycott moved to evict eleven of them.
The Irish Land League had a new strategy ready. On 19 September, at Ennis in County Clare, its leader Charles Stewart Parnell asked a crowd what to do with a tenant who took a farm from which a neighbour had been evicted. "You must shun him on the roadside when you meet him," he said, and in the streets and in the shop. No violence, just total isolation.
Mayo applied it to Boycott. Laborers stopped working for him, and local shops and services would not deal with him. He wrote to The Times on 14 October, and the story went national.
The name came from a conversation on 23 September. The journalist James Redpath told Father John O'Malley that "ostracism won't do," because the local peasantry would not know the word. O'Malley suggested "to Boycott him" instead. Redpath used it in print in the Inter-Ocean on 12 October 1880.
The ending was expensive. In November, about fifty Orangemen from Cavan and Monaghan came to bring in Boycott's harvest. They were guarded by Hussars and over a thousand police. The government spent an estimated £10,000 to save crops worth about £500. Boycott left Ireland on 1 December.
The word traveled much further than the man. The Illustrated London News soon noted that "to 'Boycott' has already become a verb active." It passed into Dutch, French, German, Italian, Polish and Russian, and into Japanese as boikotto. The dictionary that became the Oxford English Dictionary included it in 1888.
Boycott himself became a land agent in Suffolk and died there in 1897. His surname, which Etymonline notes comes from a place in England, is now a common word in many languages.