| Definition -
(1) The process of creating new words out of existing ones (e.g. super + woman = superwoman).
(2) The use of affixes to create new words. For example, the suffix -ness is used to turn adjectives into nouns (e.g. quick becomes quickness).
1. As opposed to inflection, where affixes are used to form variants of words (e.g. run becomes runs).
Etymology - The term derives from the Latin derivare, to draw off (a stream of water) from its source (from de rivo, from steam).
Oxford English Dictionary - Its first citation in this sense is from 1530:
"Derivatyon or formation, that is to saye, substantyves somtyme be fourmed of other substantyves."
(Jehan Palsgrave, Lesclarcissement de la langue françoyse, 68)