Middle English purpel, from Old English purpul, a dissimilation (first recorded in Northumbrian, in the Lindisfarne gospel) of purpure "purple dye, a purple garment," purpuren (adj.) "purple; dyed or colored purple," a borrowing by 9c. from Latin purpura "purple color, purple-dyed cloak, purple dye," also "shellfish from which purple was made," and "splendid attire generally." This is from Greek porphyra "purple dye, purple" (compare porphyry), a word of uncertain origin, perhaps Semitic, originally the name for the shellfish (murex) from which it was obtained. Purpur continued as a parallel form until 15c., and through 19c. in heraldry.
Attested from early 15c. as the name of the color formed by the mixture of blue and red (later from nearly violet-blue to not quite crimson; in the Middle Ages also applied to darker, richer reds). Tyrian purple (properly a crimson), produced around Tyre, was prized as dye for royal garments, hence the figurative use of purple for "imperial or regal power," by 1550s. Also the color of mourning or penitence (especially in royalty or clergy).
Rhetorical use in reference to "splendid, gaudy" (since mid-18c. typically of prose) is from 1590s. In U.S. politics, indicating an alternative to the increasing division of the country into red (Republican) and blue (Democratic), by 2004.
Purple Heart, the U.S. decoration for service members wounded in combat, was instituted 1932; originally it was a cloth decoration begun by George Washington in 1782. Hendrix' Purple Haze (1967) is slang for "LSD." Purple death "cheap Italian red wine" is by 1947. Purple finch, the common North American bird, was so called by 1760 in catalogues; "the name is a misnomer, arising from the faulty coloring of a plate by Mark Catesby, 1731" [Century Dictionary]. It also is called house finch, for its domesticity. Purple martin is from 1743.