As a verb, it means to let something fall, or to fall to a lower level or amount. As a noun, it can mean a small amount of liquid shaped like a tiny ball, or a decrease in something.
From Old English 'dropa' (noun) and 'dropian' (verb), meaning 'a drop, to fall in drops'. Related to German 'Tropfen'. The basic image of falling liquid has stayed the same.
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