Old English sciell, scill, Anglian scell "seashell, eggshell," related to Old English scealu "shell, husk," from Proto-Germanic *skaljo "piece cut off; shell; scale" (cf. West Frisian skyl "peel, rind," Middle Low German schelle "pod, rind, egg shell," Gothic skalja "tile"), with the shared notion of "covering that splits off," from PIE root *(s)kel- (1) "to cut, cleave" (cf. Old Church Slavonic skolika "shell," Russian skala "bark, rind;" see scale (n.1)). Italian scaglia "chip" is from Germanic.
Sense of "mere exterior" is from 1650s; that of "hollow framework" is from 1791. Meaning "structure for a band or orchestra" is attested from 1938. Military use (1640s) was first of hand grenades, in reference to the metal case in which the gunpowder and shot were mixed; the notion is of a "hollow object" filled with explosives. Hence shell shock, first recorded 1915. Shell game "a swindle" is from 1890, from a version of three-card monte played with a pea and walnut shells.
1560s, "to remove (a nut, etc.) from a shell," from shell (n.). The meaning "to bombard with shells" is first attested 1856. To shell out "disburse" (1801) is a figurative use from the image of extracting nuts. Related: Shelled; shelling.