Folk etymology refers to a particular linguistic phenomenon characterized by an act where a borrowed or obsolete phrase is reinterpreted based on analogy with other more familiar or commonly used words or phrases in the language.
Etymology is the study of the history of words. Within the context of folk etymology, the people speaking a language will guess the etymology of a particular word or phrase through the process of comparing the word to word or phrases that sounds similar and that already exist in the language.
A particular word or phrase can be considered a folk etymology by meeting a condition in which it has changed from its original borrowed form because of reinterpreted etymology. If the speakers assume an origin of a word that is considered not correct, but the pronunciation or the spelling of that word has not been changed, then it is not considered a folk etymology. A perfect example is the word “history.” The general assumption is that it is actually a combination of the words “his” and “story”, but the truth is that it has its roots in Old French and Latin and to the Greek root “historia.” The interpretation of the word as “his” and “story” is considered a folk etymology, the word “history” itself is not considered as a folk etymology because the reinterpretation of the word does not have any effect on its form.
It should be noted that words that have not been borrowed can still fall under the subject of folk etymology. This will happen if the original derivation of the word has become obsolete.