loch n.

"body of water surrounded by land and filling a depression or basin," early 12c., from Old French lack (12c., Modern French lac) and directly from Latin lacus "pond, pool, lake," also "basin, tank, reservoir" (related to lacuna "hole, pit"), from PIE *laku- "body of water, lake, sea" (source also of Greek lakkos "pit, tank, pond," Old Church Slavonic loky "pool, puddle, cistern," Old Irish loch "lake, pond"). The common notion is "basin."

There was a Germanic form of the PIE root which yielded Old Norse lögr "sea flood, water," Old English lacu "stream, pool, pond," lagu "sea flood, water, extent of the sea," leccan "to moisten" (see leak (v.)). In Middle English, lake, as a descendant of the Old English word, also could mean "stream; river gully; ditch; marsh; grave; pit of hell," and this might have influenced the form of the borrowed word.

digraph used in Old French for the "tsh" sound. In some French dialects, including that of Paris (but not that of Picardy), Latin ca- became French "tsha." This was introduced to English after the Norman Conquest, in words borrowed from Old French such as chaste, charity, chief (adj.). Under French influence, -ch- also was inserted into Anglo-Saxon words that had the same sound (such as bleach, chest, church) which in Old English still was written with a simple -c-, and into those that had formerly been spelled with a -c- and pronounced "k" such as chin and much.

As French evolved, the "t" sound dropped out of -ch-, so in later loan-words from French -ch- has only the sound "sh-" (chauffeur, machine (n.), chivalry, etc.).

It turns up as well in words from classical languages (chaos, echo, etc.). Most uses of -ch- in Roman Latin were in words from Greek, which in Greek would be pronounced correctly as /k/ + /h/, as in modern blockhead, but most Romans would have said merely /k/, and this was the regular pronunciation in English. Before c. 1500 such words were regularly spelled with a -c- (Crist, cronicle, scoole), but Modern English has preserved or restored the etymological spelling in most of them (chemical, chorus, monarch). 

Sometimes ch- is written to keep -c- hard before a front vowel, as still in modern Italian. In some languages (Welsh, Spanish, Czech) ch- can be treated as a separate letter and words in it are alphabetized after -c- (or, in Czech and Slovak, after -h-). The sound also is heard in words from more distant languages (as in cheetah, chintz), and the digraph also is used to represent the sound in Scottish loch.