1806, "a shell filled with bullets and s small bursting charge," from the name of Gen. Henry Shrapnel (1761-1842), who invented such a shell as a lieutenant in the Royal Artillery during the Peninsular War. The invention consisted of a hollow cannon ball, filled with shot, which burst in mid-air in front of the enemy; his name for it was spherical case ammunition.
The modern erroneous use in reference to what are properly shell fragments is from 1940 and the Blitz. The surname is attested from 13c., and is believed to be a metathesized form of Charbonnel, a diminutive form of Old French charbon "charcoal," in reference to complexion, hair color, or some other quality.