Definition: Dependence of a system not only on its current environment, but also on its past environment.
Husteros (late) => Husterein (be behind) => husteresis (shortcoming, deficiency) => hysteresis (late 19th century).
The term was coined by Sir James Alfred Ewing, a british physicist.
After schooling at the University of Edinburgh, he worked as a professor of mechanical engineering at the University of Tokyo and then King's College in Cambridge. It was at the latter institution where he begun his work on the magnetic properties of iron, steel and other metals. He coined the term after noticing that magnetization of a metal lagged behind changes in current.
Yesterday I learned the word in the context of economics:
An economic downturn today, has an effect on the economy tomorrow. I'm not referring to the loss of output, production, jobs, etc during the downturn - that's a given. Hysteresis refers to the fact that, even after returning to "normal," a scar is left on the economy.
People look at an economy differently depending on where it has been. This determines where it will go. The health of an economy depends not only on its current state, but also on it's past states.
Today I've found myself noticing hysteresis everywhere: