Today "naughty" is what you say to a toddler or a wink. For most of its history it was a much harsher word.
It starts with naught, "nothing." Old English had nawiht, literally "no thing," which wore down into nought and naught. Add the adjective ending -y and you get Middle English noughti, "having nothing."
Etymonline records both senses in the late 1300s: "needy, having nothing" and "evil, immoral, corrupt." Merriam-Webster dates the word to the 14th century too, with its earliest sense the now-archaic "morally vicious; wicked." Etymonline gives the "needy" sense, and the moral one fits naturally with it, since "having nothing" can slide into "worthless" and then "wicked." Merriam-Webster does not mention the "needy" sense, so that exact route is an inference.
Through the 16th to 18th centuries the word stayed harsh. Etymonline records "naughty pack" for a person of bad character, used of women and sometimes of men and, later, children. These were serious accusations, not playful ones.
The softening came in the 1630s. Etymonline lists a milder sense of "disobedient, improper, mischievous," especially of children. From then on, "naughty" was the word for a child who would not behave, and the heavy moral charge slowly drained away.
One more turn came in 1869, when Etymonline records the sense "sexually promiscuous." That is the ancestor of the knowing, teasing use in "a naughty weekend" or "naughty or nice."
Meanwhile naught kept its own life. By the early 1400s it was the arithmetic word for zero, and "all for naught" still means all for nothing.
A word that began with destitution ended up as a mild scolding and then a wink, in roughly six centuries.