Similar to Matthew Gunn's contribution, this is also not really an answer, but more of a plausible candidate.
I also first heard of the term "regularization" in the context of Tikhonov Regularization, and in particular in the context of (linear) inverse problems in geophysics. Interestingly, while I had thought that was likely due to me area of study (i.e. see my username), apparently Tikhonov actually did much of his work in that area!
My hunch is that the modern "regularization" approach likely did originate with Tikhonov's work. Building on this speculation, my contribution here has two parts.
The first part is (armchair-)historical in nature (based on perusing paper titles and my own prior biases!). While the 1963 paper Solution of incorrectly formulated problems and the regularization method appears to be the first use of the term "regularization", I would not be too certain that this is true. This reference is cited in Wikipedia as
Tikhonov, A. N. (1963). "О решении некорректно поставленных задач и методе регуляризации". Doklady Akademii Nauk SSSR. 151: 501–504. Translated in "Solution of incorrectly formulated problems and the regularization method". Soviet Mathematics. 4: 1035–1038.
giving an impression that Tikhonov himself wrote at least some of this work in Russian originally, so the phrase "regularization" could have been coined by a later translator. [UPDATE: No, "регуляризации" = regularization, see comment by Cagdas Ozgenc.] Moreover, this work appears to be part of a continuous line of research conducted by Tikhonov over a much longer time. For example the paper
Tikhonov, Andrey Nikolayevich (1943). "Об устойчивости обратных задач" [On the stability of inverse problems]. Doklady Akademii Nauk SSSR. 39 (5): 195–198.
shows that he was engaged in the same general topic at least 20 years prior. However this timeline suggests that probably the inverse-problem work started much closer to 1963 than to 1943.
[UPDATE: This translation of the 1943 paper shows that the terminology for "regularity" of was here used to refer to the "stability of the inverse problem (or the continuity of the inverse mapping)".]
The second part of my contribution is a hypothesis on how "regularization" may have been originally intended in this context. Quite commonly "regular" is used as a synonym for "smooth", particular in describing curve and/or surface geometry. In most geophysics applications, the desired solution is some gridded estimate of a spatially distributed field, and Tikhonov regularization is used to impose a smoothness prior.
(The Tikhonov matrix will typically be a discrete spatial derivative operator, akin to PDE matrices, vs. the identity matrix of ridge regression. This is because for these grids/forward models, the null-space of the forward-model matrix tends to include things like "checkerboard modes" that will pollute the results unless penalized; similar to this).
Update: These issues are illustrated in my answer here.
Summary
- I also cast my vote for Tikhonov as the originator (likely circa 1963)
- The original applications may have been geophysical inverse modeling, so the term "regularization" may refer to making the resulting maps* more smooth, i.e. "regular".
(*Based on the updated quote from the 1943 paper, this phrasing appears to be true ... but for the wrong reason! The relevant "map" was not between grid and field, $u[x]=F[\theta]$, but the inverse mapping from a forward model $\theta=F^{-1}[u]$.)