"female pudenda," 1535, apparently a variant of
malkin (q.v.) in its sense of "mop." Meaning "artificial vagina or 'counterfeit hair for a woman's privy parts' " is attested from 1617. According to "The Oxford Companion to the Body," the custom of wearing merkins dates from c.1450, was associated with prostitutes, and was to disguise either pubic hair shaved off to exterminate body lice or evidence of venereal disease.
"This put a strange Whim in his Head; which was, to get the hairy circle of [a prostitute's] Merkin .... This he dry'd well, and comb'd out, and then return'd to the Cardinall, telling him, he had brought St. Peter's Beard." [Alexander Smith, "A Complete History of the Lives and Robberies of the most notorious Highwaymen," 1714]