Cold enough to cause a sharp, stinging sensation, or quick and nimble in movement.
From 'nip,' Old English 'hnipan' (to pinch or pinch off). The word originally meant 'tending to nip or bite' and expanded to describe cold that 'nips' the skin or anything quick and sharp.
In British English, calling someone 'nippy' means they're fast and agile—like a sports car called a 'nippy little vehicle'—but the word works double duty because cold also feels sharp and quick!
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