Originally Posted by Ecstatic
Chill has been a slang term since the mid-1800's, however the meaning keeps shifting. "Let's chill" means "let's relax"; "chill out" means "calm down". At the turn of the 20th century, to chill meant to have complete mastery over something. "Staying in your house with someone" is a newer usage, a refinement of chill meaning to kick back, kick it, cold chill, etc., all of which are documented in the excellent Flappers 2 Rappers, the best book of American youth slang I've ever read (Tom Dalzell, Mirriam-Webster, 1996), covering more than a century of slang up through the mid-90s. But while the sense of "chill" meaning "kick back" is similar to flabbybody's definition in the sense of whiling away the time, just hanging out, there's no particular emphasis on where that takes place.