| Definition -
(1) To sort words as they occur in a text so as to group together those that are inflected or variant forms of the same word. (OED)
(2) To create a list of dictionary headwords. Because the headwords are usually lemmas, this process is called lemmatization.
(3) To determine the lemma for a given word.
Etymology - The word lemma means "premiss" in Greek.
Oxford English Dictionary - Its first citation for sense (1) is from 1967:
"We have … tested programs for concordances, for lemmatizing with a computer dictionary, and for transcribing from historical to phonologic alphabet."
(Computers & Humanities II., 78)