The story
From craze (“to crush”) + -y, akin to being "crazed up". Compare cracked up (“suffered a mental breakdown; be insane”), crackpot. Compare typologically Russian чо́кнутый (čóknutyj).
First known use, by meaning
- from 17th c. Of unsound mind; insane; demented.
- 16th–19th c. Flawed or damaged; unsound, liable to break apart; ramshackle.
- 16th–19th c. Sickly, frail; diseased.
Etymology from Wiktionary, CC BY-SA 4.0.