This idiom refers to someone who harbors a grudge, feels resentful, or is quick to take offense, often due to perceived slights or a sense of inferiority. The ‘chip’ symbolizes a lingering grievance that makes the person combative or defensive, as if they’re daring others to knock it off. It’s used to describe prickly, confrontational attitudes rooted in past wrongs or insecurities.

Originating in 19th-century America, the phrase comes from a custom where men would place a woodchip on their shoulder, challenging others to knock it off as a provocation to fight. The earliest known reference is in the 1843 *New York Weekly Tribune*, which describes boys placing a chip on their shoulder and daring others to start a brawl. By the 1850s, it was a common metaphor for belligerence, appearing in literature and journalism. Its use spread to describe emotional rather than physical readiness to fight, reflecting American individualism and sensitivity to honor.