Apparently first used widely in English in the late 1960s or early 1970s. From Persian فارسی, meaning "relating to Fars", the Arabicized form of the name of the province of Pars (پارس) which was adopted in Iran following the Arab conquest of Persia in the 7th century. The sense for the hijra argot is from Hindi फ़ारसी from the same word.
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