What does Boxing Day have to do with boxing?
1590s, "destroy the clarity of" (a transferred sense); literal sense ("to bathe in mud") is from c.1600; perhaps frequentative formation from mud, or from Dutch moddelen "to make (water) muddy," from the same Proto-Germanic source. Sense of "to make muddy" is from 1670s; that of "make confused" first recorded 1680s. Meaning "to bungle" is from 1885. Related: Muddled; muddling.
1818, from muddle (v.).