early 14c., "a devil, incubus, fairy," from Old French gobelin (12c., as Medieval Latin Gobelinus, the name of a spirit haunting the region of Evreux, in chronicle of Ordericus Vitalis), of uncertain origin, perhaps related to German kobold (see cobalt), or from Medieval Latin cabalus, from Greek kobalos "rogue, knave," kobaloi "wicked spirits invoked by rogues," of unknown origin. Another suggestion is that it is a diminutive of the proper name Gobel.
Though French gobelin was not recorded until almost 250 years after appearance of the English term, it is mentioned in the Medieval Latin text of the 1100's, and few people who believed in folk magic used Medieval Latin. [Barnhart]
in Western folklore, a wandering sprite that is usually mischievous but often malicious. Goblins supposedly live in grottoes but attach themselves to households, where they are believed to bang upon pots and pans, snatch nightclothes off the bodies of sleeping people, move furniture at night, and flee after rapping on walls and doors. They are thought to help parents discipline children by rewarding the latter with presents when they are good and punishing them when they are disobedient. The word goblin derives from the Greek kobalos ("rogue").