FOOLSCAP
There is some disagreement over the origin of this word. The Oxford English Dictionary defines a foolscap as "a cap of fantastic shape, usually garnished with bells, formerly worn by fools or jesters." It is also the name given to a dunce's cap. The OED gives as a second definition "The device of a 'fool's cap' used as a watermark for paper."
However, Eliezer Edwards in Words, Facts, and Phrases quotes from De Vere, Studies in English who says that "This term has not, as is generally believed, any reference to the water-mark of a cap and bells. The word is a corruption of folio shape." And from Notes and Queries he quotes, "In a statute of Queen Anne, a particular kind of paper is called 'Genoa Foolscap.' The word foolscap is a corruption of the Italian "foglio capo," a chief or full-sized sheet of paper."
The Oxford English Dictionary. Oxford: Clarendon Press, 1933.
Edwards, Eliezer. Words, Fact, and Phrases: A Dictionary of Curious, quaint, and Out-of-the-Way Matters. Philadelphia: Lippincott, 1881.