It's hypothesized that the origin of "ghetto" is Italian around 1516. The term comes from an area of Venice that was near a foundry. It was one of the few places Jews in Venice were allowed to live since no one else wanted to live near a foundry. The first found occurrence of the word ghetto meaning a place where Jews live comes from a travel book written in 1611 by Thomas Coryat. His book Coryat's Crudities covers a stop over in Venice. A passage reads "the place where the whole fraternity of the Jews dwelleth together, which is called the Ghetto."

Although "ghetto" means a pretty horrible place today, Jewish ghettos in Italy during the 17th and 18th centuries were not the worst possible places for Jews to live. Unlike the forced ghettoization under Nazism, Jews found ghettos a respite, a place to maintain their culture and practice their beliefs openly.

Jews were being driven out of many European nations and Italy took many in. The Italian ghettos were not intended to persecute Jews but to provide Jews a safe, cloistered harbor in a strict Catholic country. Venice, being a locus for global trade, featured other "ghettos" where foreign merchants from other nations were also required to live. For example, there was in Venice a German ghetto and a Turkish ghetto. In fact, it's more likely the case Jews lived in walled ghettos for their own protection. Venice Jews paid guards to watch the gate to the ghetto at night.

It was only when America learned of Nazi atrocities against the Jews did "ghetto" come to mean a hellacious area to live.