by 1995, a diminutive formation from application + -let.
Entries linking to applet
application n.
early 15c., "the bringing of something to bear on something else," from Old French aplicacion (14c.), from Latin applicationem (nominative applicatio) "a joining to, an attaching oneself to; relation of a client to a patron," noun of action from past-participle stem of applicare "attach to, join, connect," from ad "to" (see ad-) + plicare "to fold" (from PIE root *plek- "to plait").
The meaning "sincere hard effort" is from c. 1600. That of "a formal request to be hired for a job or paid position" is by 1851. The computer sense "program designed to carry out specific tasks or solve specific problems within a larger system" is a shortening of application program (1969).
-let
diminutive noun-forming element, Middle English, from Old French -elet, which often is a double-diminutive. It consists of Old French diminutive -et, -ette (see -et) added to nouns in -el, which in many cases represents Latin diminutive -ellus; see -el (2)). "The formation did not become common until the 18th c." [OED].