Shrapnel originally meant one specific shell. Most things called shrapnel today are not it.
Henry Shrapnel was born in Bradford on Avon, Wiltshire, in 1761. He was an officer in the Royal Artillery. After returning to England in 1784, he began experimenting with hollow cannonballs packed with lead shot, designed to burst in the air.
The idea joined two things. Canister shot already sprayed many balls at once, like a shotgun. Shrapnel added a time fuze to open the case and scatter the shot over the enemy at a distance.
He called his invention "spherical case shot." The British Army adopted a version in 1803, and Wikipedia says it saw its first combat use in 1804, against Batavian forces at Fort Nieuw-Amsterdam in Surinam. The shell soon acquired its inventor's name. Etymonline dates "shrapnel" in English to 1806, and Wikipedia says the British government formalised the name in 1852.
Shrapnel was rewarded, up to a point. In 1814 the government granted him £1,200 a year for life. Wikipedia notes that bureaucracy kept him from receiving the full benefit. He rose to lieutenant general in 1837 and died in 1842.
His shell had a long life and then vanished. It was used until the First World War, when high-explosive shells replaced it for attacking troops. By the Second World War it was out of use.
The word, though, kept going and changed meaning. Etymonline says the common use of "shrapnel" for shell fragments emerged around 1940, during the London Blitz, and calls it an erroneous use. Wikipedia describes the same drift. Today almost any piece of a bomb, shell or casing gets the name, even though Shrapnel's design used balls, not fragments.
The surname itself has a separate history. Etymonline traces it to the 13th century and thinks it probably comes from Old French Charbonnel, from charbon, "charcoal." That may refer to someone's dark hair or complexion.