late 14c., "influencing by physical virtues or capabilities, effective with respect to inherent natural qualities," from Medieval Latin virtualis, from Latin virtus "excellence, potency, efficacy," literally "manliness, manhood" (see virtue). It preserves Middle English virtue in the sense of "efficacy, power to do."

The meaning "being something in essence or effect not in fact; existing virtually though not actually" is attested from mid-15c., probably via the now-obsolete sense of "capable of producing a certain effect" (early 15c.). Opposed to actual, real, literal.

By 1831 in optics, of apparent images, as in a reflection. The computer sense of "not physically existing but made to appear by software" is attested from 1959, originally of memory.

late 15c., "possession of force," a sense now obsolete; 1640s as "essential being apart from external form;" see virtual + -ity. By 1836 as "a potentiality." Hence "state or quality of not being real."

early 15c., "as far as essential qualities or facts are concerned;" from virtual + -ly (2). The sense of "in principle or effect, if not in reality," hence "in effect, as good as" is by c. 1600.

1640s, "an unprincipled popular orator or leader; one who seeks to obtain political power by pandering to the prejudices, wishes, ignorance, and passions of the people or a part of them," ultimately from Greek dēmagōgos "popular leader," also "leader of the mob," from dēmos "people, common people" (originally "district," from PIE *da-mo- "division," from root *da- "to divide") + agōgos "leader," from agein "to lead" (from PIE root *ag- "to drive, draw out or forth, move").

In a historical sense from 1650s, "a leader of the masses in an ancient city or state, one who sways the people by oratory or persuasion." Often a term of disparagement since the time of its first use (in Athens, 5c. B.C.E.). Form perhaps influenced by French démagogue (mid-14c.).

Indeed, since the term demagogos explicitly denotes someone who leads or shepherds the demos, the eventual use of this word as the primary epithet for a political panderer represents a virtual reversal of its original meaning. The word demagogos in fact implies that the people need someone to lead them and that political power, at least in part, is exercised appropriately through this leadership. [Loren J. Samons II, "What's Wrong With Democracy," University of California Press, 2004]

A Latin word in a similar sense was plebicola "one who courts (literally 'cultivates') the common people," from plebs "the populace, the common people" + colere "to cultivate."