sardine n.

"pilchard, type of small oily fish," migratory and highly esteemed as a food, early 15c., from Latin sardina, sarda, from late Greek sardinē, sardinos, earlier sardē, which is often said to be from or related to Sardō "Sardinia" (see Sardinia), the Mediterranean island, near which the fish probably were caught and from which they were exported.

But Klein writes, "It is hardly probable that the Greeks would have obtained fish from so far as Sardinia at a time relatively so early as that of Aristotle, from whom Athenaios quotes a passage in which the fish sardinos is mentioned." There were other place names in Sard- in the region. D'Arcy Thompson ("A Glossary of Greek Fishes") writes that "The pilchard does not reach Palestine, and the various Clupeids to be found in Greece are not well identified," and also notes that Greek sarda, whatever its origin, "became a very general name, not only for pickled Tunny and Pelamyd, but for a great variety of other potted fish." 

When cold the fish are placed on tables, to be arranged in the boxes, in oil dipped from barrels. The oil being worth more than the fish, bulk for bulk, it is an object to fill the boxes as closely as possible with fish. [Century Dictionary]

Hence, as a verb, "to pack closely" (by 1895); the colloquial phrase packed like sardines (in a tin, etc.) is recorded by 1845. As the name of a hide-and-seek party game where each person who finds the hider then joins in hiding, by 1924.