early 14c., from Old French dispenser "give out" (13c.), from Latin dispensare "disburse, administer, distribute (by weight)," frequentative of dispendere "pay out," from dis- "out" (see dis-) + pendere "to pay, weigh" (see pendant).
In Medieval Latin, dispendere was used in the ecclesiastical sense of "grant license to do what is forbidden or omit what is required" (a power of popes, bishops, etc.), and thus acquired a sense of "grant remission from punishment or exemption from law," hence "to do away with" (1570s), "do without" (c.1600). Older sense is preserved in dispensary. Related: Dispensed; dispensing.