(n.) the British pound
The reason why the British pound is called the pound sterling is because the coins at use in England around the time this word first emerged in the language were decorated with stars.
Or at least, that’s the most likely theory here.
Other explanations suggest that the sterling coins somehow took their name from the starling bird; that the word comes from another word for a coin, a stater; or that the coins take their name from Easterling, an old word for an inhabitant or trader from the eastern area of Germany, who perhaps minted the first sterling coinage, or introduced it to Anglo-Saxon England.
The ‘starling’ theory is said to be based on the fact that some coins minted during the reign of the pre-Conquest king Edward the Confessor were decorated with a quartet of marlets (i.e. stylized heraldic birds). It’s certainly true that the birds on these early coins look decidedly starling-like, but the written and phonological evidence just doesn’t back this theory up.
In Old English, a starling was a stær, or stærlinc; had that word also been applied to coinage, we would expect sterling to have developed just as starling has and still be spelled with an A today. Instead, there’s very little crossover between these two words to speak of, implying that they are in fact unrelated.
The ‘stater’ theory is just as troublesome. Stater has its roots in French and Latin, but was originally an Ancient Greek coin (typically, but not always, worth 4 drachmas). That word didn’t show up in English until the late 1300s, some two centuries or more after sterling, and it’s difficult to imagine a word like stater losing its second T and morphing into something resembling sterling given the development of both words and the written evidence we have on offer.
There is, admittedly, another theory here that sterling might come from an Old French word estedre, meaning ‘to state’ (i.e. to weigh or quantify). It shares the same root as stater, but again, it’s difficult to imagine that middle consonant simply disappearing without any evidence of it ever being used beforehand.
The ‘Easterling’ theory is perhaps the most popular one here, and has been offered as an explanation of the word sterling since the fourteenth century. But again, the evidence just doesn’t back this idea up and, rather than provide an explanation of where the word sterling comes from, it seems more likely that the opposite is true: namely, that this theory is an old folk etymology, sparked by the word sterling’s entirely accidental similarity to Easterling. So how do we know that?
Well, for one, we wouldn’t expect a stressed initial E like the one in Easterling to simply fall out of use. Second, if sterling were indeed to be derived from it, we would expect to find at least some early forms of sterling spelled likewise with an initial vowel; in fact, sterling has been spelled with an initial S in English since its very earliest known appearance in the language in the late 1200s. (And even earlier than that, it is found spelled with an initial S in Anglo-Latin documents dating back in the mid 1100s.)
Admittedly, some early Anglo-French texts do record an early E-spelling for sterling—esterling—but French has a broader tendency to add extraneous Es to the front of established words beginning with an S (as in esquire, espionage, escallop, espouse, esprit). In light of the other evidence here, ultimately, it seems likely that this is an example of that process (a form of epenthesis), rather than evidence of an earlier origin of sterling in the word ‘east’.
All told, as the Oxford English Dictionary explains:
Until recently, the prevailing view was that the word [sterling] was a shortening of Easterling ... [and] that the coin was originally made by Easterling moneyers; but the stressed first syllable would not have been dropped.
Nevertheless these E-initial forms of sterling in French appear to have sparked some confusion with Easterling, leading to the theory that the two words are connected:
[Medieval-period phrases like ‘Easterning money’ arise] from the very probably mistaken assumption that post-classical Latin ‘esterlingus’ ... and Anglo-Norman ‘esterling’ ... are etymologically related to this word [Easterling], the coin name being assumed to have denoted originally ‘the coin of the Easterlings’. ... This assumption is found as early as the 14th cent ... apparently ultimately reflecting the same confusion.
So if not derived from starling, stater or Easterling, what exactly is a sterling? Yes, it’s probably nothing more than a little star.
The Old English word for ‘star’ was steor, which would have made a steorling a ‘little star’. Troublingly, there’s little evidence of stars being used to decorate coins in Anglo-Saxon England, but there is evidence of stars being used on French coinage from around this time. The Norman Conquest of 1066 would plausibly have led to these coins becoming known, if not used, in England in the eleventh and twelfth centuries; given a fairly limited understanding of Norman French among the English population at the time, moreover, it’s possibly the Anglo-Saxons would have seen fit to to coin (no pun intended) their own word for them.
Again, as the OED explains:
[Sterling] presumably was descriptive of some peculiar characteristic of the new Norman penny. The most plausible explanation is that it represents a late Old English *steorling, ‘coin with a star’ ... some of the early Norman pennies having on them a small star.