--excerpt from the Oxford English Dictionary
In 1882, Sophia Caulfeild and Blanche Saward (The Dictionary of Needlework) wrote that the word "tatting" was derived from "tatters;" and this was repeated by many later writers. Dan Rusch-Fischer distrusts this speculation and has done his own research into the origins of the word. He has submitted his findings to the Oxford English Dictionary for consideration. You can read about this in his article "The Historical & Etymological Roots of the Word Tatting" http://www.tribbler.com/tatman/Tatting-HistoricalAndEtymologicalRoots.html
According to Dan, "tatting" originally meant simply a narrow lace used for edging, which could be either machine or hand-made; and if hand-made, not necessarily made by what we call tatting today. (Yes, in the 1800's there were "tatting machines" for manufactured lace to further complicate our history.)
His earliest sighting of the work "tatting" is in a letter dated 1819, and the earliest usage to refer to tatting as a handicraft is the 1835 short story, The Masquerade, by Charles Robert Forrester.
My own earliest sighting definitely as a handicraft is the 1832 novel, Aims and ends: and Oonagh Lynch, by Caroline Sheridan, where the completion of a girl's education is described: "...but the honest mistress of the academy would not have thought she had justly fulfilled all that the word 'genteelly' taught an anxious parent to expect, if Jessy had not also painted very bright heartsease and very formal roses on hand-skreens, played nearly thirty sonatas tolerably perfect, and, above all, embroidered, netted, knitted, tatted, and done every thing that needles may do. At fifteen, she was reported as 'finished;'....but the knitting, netting, and tatting continued to flourish....." Earlier in the book, "Mrs. Danby stayed in the tent with Lady Portbury, where she made several yards of tatting."
In another 1832 publication, Dramatic Stories, in the short story, The Wish Unwished, two young men are given a shopping list including 10 yards of tatting, and they comically have no idea what it is. Whether this means real tatted lace, who knows?
In future, I may treat you to random early tatting quotations for your entertainment. (Or subject you to same,when I'm too busy/lazy to make up a proper blog post.)
All of these books are available in the Haithi Digital Trust.
Thank you to Erin, for supplying the OED citation.