Old English blod "blood, fluid which circulates in the arteries and veins," from Proto-Germanic *blodam "blood" (source also of Old Frisian blod, Old Saxon blôd, Old Norse bloð, Middle Dutch bloet, Dutch bloed, Old High German bluot, German Blut, Gothic bloþ), according to some sources from PIE *bhlo-to-, perhaps meaning "to swell, gush, spurt," or "that which bursts out" (compare Gothic bloþ "blood," bloma "flower"), from suffixed form of root *bhel- (3) "to thrive, bloom." But Boutkan finds no certain IE etymology and assumes a non-IE origin.
There seems to have been an avoidance in Germanic, perhaps from taboo, of other PIE words for "blood," such as *esen- (source of poetic Greek ear, Old Latin aser, Sanskrit asrk, Hittite eshar); also *krew-, which seems to have had a sense of "blood outside the body, gore from a wound" (source of Latin cruour "blood from a wound," Greek kreas "meat"), but which came to mean simply "blood" in the Balto-Slavic group and some other languages.
Inheritance and relationship senses (also found in Latin sanguis, Greek haima) emerged in English by mid-13c. The meanings "person of one's family, race, kindred; offspring, one who inherits the blood of another" are late 14c. As the fluid of life (and the presumed seat of the passions), blood has stood for "temper of mind, natural disposition" since c. 1300 and been given many figurative extensions. The slang meaning "hot spark, a man of fire" [Johnson] is from 1560s. Blood pressure is attested from 1862. Blood money is from 1530s; originally money paid for causing the death of another.
Blood type is from 1928. That there were different types of human blood was discovered c. 1900 during early experiments in transfusion. To get blood from a stone "do the impossible" is from 1660s. Expression blood is thicker than water is attested by 1803, in reference to family ties of those separated by distance. New (or fresh) blood, in reference to new members of an organization or group, especially ones bringing new ideas and fresh vigor or strength, is from 1880.