There appear to be a number of theories as to why the slang for the vagina (or perhaps more precisely, the vulva) is pussy. The most common derivation that I see in dictionaries and other resources is that it can be traced back to the Old Norse puss meaning "pouch" or "pocket". In that sense, it is not unlike the etymology of vagina which itself comes from the Latin vagina meaning "sheath" or "scabbard".
slang
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