(From Yahoo Answers)
1839, only survivor of a slang fad in Boston and New York c.1838-9 for abbreviations of common phrases with deliberate, jocular misspellings (cf. K.G. for "no go," as if spelled "know go"); in this case, "oll korrect." Further popularized by use as an election slogan by the O.K. Club, New York boosters of Democratic president Martin Van Buren's 1840 re-election bid, in allusion to his nickname Old Kinderhook, from his birth in the N.Y. village of Kinderhook. Van Buren lost, the word stuck, in part because it filled a need for a quick way to write an approval on a document, bill, etc. The noun is first attested 1841; the verb 1888. Spelled out as okeh, 1919, by Woodrow Wilson, on assumption that it represented Choctaw okeh "it is so" (a theory which lacks historical documentation); this was ousted quickly by okay after the appearance of that form in 1929. Okey-doke is student slang first attested 1932. Greek immigrants to America who returned home early 20c. having picked up U.S. speech mannerisms were known in Greece as okay-boys, among other things.
H.L. Mencken once described "O.K." as "the most successful of Americanisms," an estimation verified by U.S. troops during the Second World War, who reported encountering the phrase all over the world. Of all the scores of theories (and sub-theories) as to the origin of "O.K.," the most widely heard traces "O.K." to the "O.K. Club," a political committee supporting Martin Van Buren's unsuccessful bid for the Presidency in 1840. The "O.K.," it is said, was short for "Old Kinderhook," Van Buren's nickname.
It appears that this theory is not so much wrong (the "O.K. Club" certainly existed) as it is incomplete. Chances are good the Van Buren's partisans would never have named their club "O.K." had the phrase not already been widely known as an abbreviation of "oll korrect," a humorous misspelling of "all correct." American speech in the early 1800s was awash in similar abbreviations, two of which, "N.G." ("no good") and "P.D.Q." ("Pretty Damn Quick"), are still heard today.
Ironically, while "O.K." didn't save Van Buren's campaign, the campaign gave "O.K." a new lease on life -- until then, it had never been as popular as a competing phrase, "O.W." (for "oll wright"). (By the way, before we start feeling too superior to the cornball 1800s, is "oll wright" really any worse than the "excuuuse me!" or "not!" fads of a few years ago?).
OK is without doubt the best-known and widest-travelled Americanism, used and recognised even by people who hardly know another word of English. Running in parallel with its popularity have been many attempts to explain where it came from — amateur etymologists have been obsessed with OK and theories have bred unchecked for the past 150 years.
