M-W defines watermark as:
1) a mark indicating the height to which water has risen.
2) a marking in paper resulting from differences in thickness usually produced by pressure of a projecting design in the mold or on a processing roll and visible when the paper is held up to the light.
Example of watermark:
also water-mark, 1708, "distinctive mark on paper," from water (n.1) + mark (n.1). Similar formation in German wassermarke. Not produced by water, but probably so called because it looks like a wet spot.
and though Etymonline suggests no direct relation to water, Wikipedia points out that it was the process with watery paper that gave rise to its name:
The origin of the water part of a watermark:
can be found back when a watermark was something that only existed in paper. At that time the watermark was created by changing the thickness of the paper and thereby creating a shadow/lightness in the watermarked paper. This was done while the paper was still wet/watery and therefore the mark created by this process is called a watermark.
Wikipedia also notes that the process is quite old, and was known during medieval times in Italy
Watermarks were first introduced in Fabriano, Italy, in 1282.
In Italian it is called filigrana, a term mutuated from goldworking, unrelated to water.
So, where does watermark come from? Was is a calque from the German expression wassermarke or of other foreign expressions? Or is it an English coinage derived from the literal meaning of watermark?
One more thing; I guess that watermarks existed in England before the 18th century, in banknotes for instance. What were they called originally?