[This is a fast-access FAQ excerpt.]
"Posh" (probably) does NOT stand for "port out, starboard home".
MWCD10, p. 27a, says, "our editors frequently have to explain to
correspondents that the dictionary fails to state that the origin of
posh is in the initial letters of the phrase 'port out, starboard
home' -- supposedly a shipping term for the cooler accommodations on
steamships plying between Britain and India from the mid-nineteenth
century on -- not because the story is unknown to us but because no
evidence to support it has yet been produced. Some evidence exists
that casts strong doubt on it; the word is not known earlier than
1918 (in a source unrelated to shipping), and the acronymic
explanation does not appear until 1935."
A tenable theory is that "posh" meant "halfpenny" (from Romany
posh "half") and then "money" before acquiring its present
meaning. Or it may come from the slang "pot" (= "big", "a person
of importance"). Or it may be a contraction of "polished".
I got e-mail from someone whose grandmother claimed to have seen
steamship tickets with "P.O.S.H." overprinted. And William Safire's
I Stand Corrected (Times, 1984, ISBN 0-8129-01097-4) quotes a
letter from an Ellen Thackara of Switzerland: "When I lived in the
Orient the P.&O. (Pacific [sic] and Orient) Line out of London did
put beside the names of important people 'POSH', so they would have
the cooler side of the ship." (The P&O is actually the Peninsular
and Oriental Steam Navigation Company; it's not clear whether the
mistake is Thackara's or Safire's.) But to convince us, you'll have
to *find* one of these tickets and send a copy to Merriam-Webster.