Origins
Sanction is an auto-antonym — a word that carries two opposite meanings. To sanction something can mean to approve it (the board sanctioned the proposal) or to punish for it (the UN imposed sanctions on the regime). This is not a quirk of English evolution but a feature inherited directly from Latin.
The Latin verb sancire meant to make sacred, to ratify, or to decree. A sanctio was a formal decree, specifically the clause that established penalties for violating the decree. Roman law bundled the authorization and the punishment into a single legal instrument. When you ratified a rule, you simultaneously established the consequences for breaking it. The noun sanctio thus referred both to the solemn approval of the law and to the teeth that enforced it.
French inherited both senses and passed them to English in the 16th century. For several centuries, the approval meaning dominated. Kings sanctioned acts of parliament, authorities sanctioned commercial activities. The punishment meaning gained prominence in the 20th century through international relations, where economic sanctions became a primary tool of diplomatic pressure.
Latin Roots
The same Latin root sancire produced a rich family of words through a different derivation. Sanctus (made sacred) gave English saint, sanctify, sanctuary, and sacrosanct. Sacred itself comes from the related Latin sacer. All these words share the underlying concept of something set apart as inviolable — which connects back to the legal meaning of sanction, where a decreed rule is made inviolable by attaching punishment to its violation.
The auto-antonym quality of sanction occasionally creates genuine ambiguity. Headlines reading Government Sanctions Arms Sales can be read as either approval or prohibition depending on context. Most English speakers navigate this unconsciously through context, but the word remains a favorite example in linguistics courses on semantic paradox.