A picadil is an applied shape on the edge of clothing, especially a collar. Such shapes were common on medieval and Renaissance clothing. They were made of pieces of cloth that were cut, folded and sewn on, forming shapes such as scallops, tabs, or oak leaves. The spelling of the word was (and still is) rather variable, with forms such as pickadil and piccadill also appearing. Around the beginning of the seventeenth century, the word was applied to the deeply scalloped edges of the wide and elaborate collars, usually with a broad laced or perforated border, that were then in fashion.
The claim of the word to our attention and immortal fame is mainly through a tailor named Robert Baker, who had a shop in the Strand in London around the end of the sixteenth century and the beginning of the seventeenth. He generated a large fortune from making and selling picadils, much of which he spent buying up a large tract of what was then open country to the west of London. Around 1612 he built a country house there. This was nicknamed Piccadilly Hall, either from the source of the tailor’s wealth, or because it was at the edge of his property, as the picadils were at the edge of items of clothing. The nickname stuck and gave its name to the street in London that leads out of Piccadilly Circus, and by extension to all the other instances of the name in Britain and elsewhere.
By the way, picadil is not a relative of peccadillo. The latter came into English from the Spanish pecadillo, a little sin, from Latin peccare, to sin. And circus in British usage is a rounded open space in a town at which several streets converge, a sense that goes back to the classical Latin meaning of a roughly circular arena.
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