1530s, "the laying down of limits," from Latin circumscriptionem (nominative circumscriptio) "an encircling; fact of being held to set limits," noun of action from past participle stem of circumscribere "make a circle around; restrain, confine, set the boundaries of" (see circumscribe).
Earliest use is figurative, of meanings. Meaning "fact or quality of being circumscribed" is from 1540s; that of "act of bounding, settling, or determining" is from c. 1600. Sense of "a circular inscription" (on a coin, seal, etc.) is from 1560s.