Old English nied (West Saxon), ned (Mercian) "necessity, compulsion, duty; hardship, distress; errand, business," originally "violence, force," from Proto-Germanic *nauthis (cf. Old Saxon nod, Old Norse nauðr, Old Frisian ned, Middle Dutch, Dutch nood, Old High German not, German Not, Gothic nauþs "need"), probably cognate with Old Prussian nautin "need," and perhaps with Old Church Slavonic nazda, Russian nuzda, Polish nędza "misery, distress," from PIE *nau- "death, to be exhausted" (see narwhal).
The more common Old English word for "need, necessity, want" was ðearf, but they were connected via a notion of "trouble, pain," and the two formed a compound, niedðearf "need, necessity, compulsion, thing needed." Nied also might have been influenced by Old English neod "desire, longing," which often was spelled the same. Common in Old English compounds, e.g. niedfaru "compulsory journey," a euphemism for "death;" niedhæmed "rape," the second element being an Old English word meaning "sexual intercourse;" niedling "slave." Meaning "extreme poverty, destitution" is from c.1200.