smug adj.

Middle English smok, "women's undergarment, shift," from from Old English smoc "garment worn by women," corresponding to the men's shirt, from Proto-Germanic *smukkaz (source also of Old Norse smokkr "a smock," but this perhaps is from Old English; Old High German smoccho "smock," a rare word; North Frisian smok "woman's shift," but this, too, perhaps is from English).

Klein's sources, Barnhart and the OED see this as connected to a group of Germanic sm- words having to do with creeping or pressing close, such as Old Norse smjuga "to creep (through an opening), to put on (a garment)," smuga "narrow cleft to creep through; small hole;" Old Swedish smog "a round hole for the head;" Old English smugan, smeogan "to creep," smygel "a burrow." Compare also German schmiegen "to cling to, press close, nestle;" and Schmuck "jewelry, adornments," from schmucken "to adorn," literally "to dress up."

Watkins, however, traces it to a possible Germanic base *(s)muk- "wetness," figuratively "slipperiness," from PIE root*meug- "slimy, slippery" (see mucus). Either way, the original notion seems to have been "garment one creeps or slips into," by the same pattern that produced sleeve and slip (n.2).

In the original sense it has largely been replaced by euphemistic shift (n.2). Until 18c. smock was so much the common word for a woman's undergarment that it could be emblematic of womanhood generally, as in verb smock "to render (a man) effeminate or womanish" (1610s); smocker "man who consorts with women" (18c.). Smock also was an adjective, "belonging or relating to women;" smock-face "person having a pale, effeminate face" is attested by c. 1600 (Dryden's Endymion was a smock-fac'd boy). Smell-smock "licentious man" was in use c. 1550-c. 1900.

The modern meaning "woman's or child's loose dress or blouse" is from 1907; the sense of "loose garment worn by artists over other clothes" is from 1938. A smock-race (1707) was a foot-race for women and girls, an old country pastime:

Smock Races are commonly performed by the young country wenches, and so called because the prize is a holland smock, or shift, usually decorated with ribbands. [Joseph Strutt, "Sports and Pastimes of the People of England," 1867]

also shmuck, "contemptible person," 1892, from East Yiddish shmok, literally "penis," probably from Old Polish smok "grass snake, dragon," and likely not the same word as German Schmuck "jewelry, adornments," which is related to Low German smuck "supple, tidy, trim, elegant," and to Old Norse smjuga "slip, step through" (see smock).

In Jewish homes, the word was "regarded as so vulgar as to be taboo" [Leo Rosten, "The Joys of Yiddish," 1968] and Lenny Bruce wrote that saying it on stage got him arrested on the West Coast "by a Yiddish undercover agent who had been placed in the club several nights running to determine if my use of Yiddish terms was a cover for profanity." Euphemized as schmoe, which was the source of Al Capp's cartoon strip creature the shmoo.

"[A]dditional associative effects from German schmuck 'jewels, decoration' cannot be excluded (cross-linguistically commonplace slang: cf. Eng. 'family jewels')" [Mark R.V. Southern, "Contagious Couplings: Transmission of Expressives in Yiddish Echo Phrases," 2005]. But the English phrase refers to the testicles and is a play on words, the "family" element being the essential ones. Words for "decoration" seem not to be among the productive sources of European "penis" slang terms.