To put equipment, software, or a system into place so it is ready to be used. It can also mean formally putting someone into an official job or position.
From Medieval Latin 'installare' meaning 'to place in office', from 'in-' (in) + 'stallum' (place, seat). The physical sense of setting something in its place expanded to machines and software.
Originally, to install was to ‘seat’ someone in power—literally giving them a place. Now we install apps, not kings, but the idea is similar: you’re giving something an official place in your system.
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