by 1979, initialism (acronym) from role-playing game (see roleplay). As an initialism for rocket-propelled grenade, by 1970.
Entries linking to rpg
roleplay n.
also role-play, "act or condition of behaving as another would behave in a certain situation," 1958, from the verbal phrase, "to act out the role of" (by 1949); see role (n.) + play (v.). Related: Role-playing