Where things stand
In current English, situation usually means a combination of circumstances: money, politics, weather, a tense room. It can still mean a physical setting, the way a house sits against a valley or a garden against a river. In British usage it can also mean a post of employment. All of those senses share one idea, position, but they do not share one age. The origin of the word situation is a story about a noun of place that later learned to name a state of affairs.
A fifteenth-century loan
English first records the noun in the early fifteenth century, with Middle English spellings such as situacioun and situacion. It is a borrowing with two doors. Historical dictionaries treat it as coming partly from French situation and partly from Medieval Latin situatio. Some etymological sketches call the French source Old French situacion; others call that French stage Middle French. The disagreement is about the label for the French period, not about the Latin core.
The Latin word is an action noun. Situatio meant a position or a placing, formed from the past-participial stem of situare, to place or locate. The matching English verb situate arrives in the same early-fifteenth-century window, from the Medieval Latin past participle situatus. Once both verb and noun were in English, the modern shape is transparent: situate plus -ion, the suffix English uses for Latin and French nouns of action or result. An obsolete spelling scituation, with an extra c, is hypercorrect. It does not point to a different ancestor.
The earliest English meaning is physical. Dictionaries that date first use to the fifteenth century do so for the sense of how something is placed in relation to its surroundings: a site, a locality, a layout. A pleasant situation was a pleasant spot on the ground, not yet a pleasant predicament.
The Latin noun behind the verb
Situare is built on Latin situs, a place or position. English later took that noun in other clothes: site, through French, and the specialized English situs of law, anatomy, and botany. The Latin phrase in situ, in position or in the original place, still carries the old noun almost unchanged. Situation, situate, site, and in situ are therefore one family in English, even when speakers no longer feel the kinship.
The deeper ancestry of situs is less settled than the Romance path. Many English etymologies attach Latin situs to a Proto-Indo-European root reconstructed as *tkei- or *tḱey-, with a sense like to settle, dwell, or be at home. That grouping would make the English noun a distant relative of home, of German Heim, and of Gothic haims, village, and of forms such as Sanskrit kseti, abides or dwells, Greek kome, village, and Lithuanian kaimas, village. A tighter Latin analysis treats the noun situs as an action noun from sino, to put down or allow, a verb some reconstructions also hang on that same root. What can be said with confidence is the Latin place-noun. The Indo-European comparison is a scholarly map, not a chain of identical meanings from village to sitcom.
Close cousins in the Romance languages keep the same learned shape: French situation, Italian situazione, Spanish situación, Portuguese situação. German Situation and later Slavic borrowings of the same item are learned imports, not words inherited from Proto-Germanic or Proto-Slavic.
When place became circumstance
For a long time the English noun stayed on the ground. Writers used it for the siting of a town, the placing of a plant, the lie of a house among roads and fields. It answered a question about location.
Around 1710 a figurative sense is recorded: state of affairs, position measured against circumstances rather than against a hillside. That is the sense that now dominates. A financial situation is not a plot of land. A political situation is a balance of conditions. From that extension came the narrower, more urgent use: a difficult or unusual state of affairs, the remark that there is a situation to deal with. Dictionaries also list an archaic sense, state of health, another way of treating the body as something that has a position.
By 1803 the noun could mean employment, a post, an office. Nineteenth-century fiction still uses that job sense freely; a clerk could lose his situation as readily as he could lose his wages. British English kept the employment meaning longer than American English, which mostly shifted the work to job, post, or position. The logic is the same as the geography: a situation is a place one occupies, whether on a riverbank or on a payroll.
Later English then built on the circumstances sense rather than on the map sense. Situational appears in the nineteenth century and becomes common in the twentieth. Situation comedy, shortened to sitcom, names a comic form built on recurring circumstances rather than on a one-off joke. Situation room and situation ethics likewise treat the word as a bundle of conditions, not a piece of ground.
What still points backward
The surviving physical sense is the best historical clue. When a guidebook still praises a house for its situation, it is using the noun almost as speakers did in the 1400s. Beside that usage sit site and in situ, two other English lives of Latin situs. The abstract noun that now covers a messy meeting, a job, or a plot twist began as a name for how a thing sat in space. The later senses did not erase that idea. They moved the where from the landscape into the circumstances.