[derivation and original literal meaning doubtful.
The ordinary conjecture (since Skinner) has been that cater is F. quatre four, used in the sense of quatrième fourth, from the ridiculousness of calling cousin or relation to so remote a degree (Johnson); but etymologically this receives no support from French (where quatre-cousin would be absurdly impossible), nor from the Eng. use of cater in CATER sb.2, CATER adv., or CATERCAP, nor is there any trace of the word having ever been quater, quatre, or quarter; moreover Johnsons explanation seems hardly to suit early usage, however it may have influenced later use.
Fewer difficulties appear in supposing cater to be the Eng. CATER sb.1 or v.1, and taking cater-cousins as originally those who were cousins by being catered for or boarded together, or by catering for each other: cf. companion lit. fellow bread-eater. It would be easiest perhaps to account for such a formation from the verb, but as there is not at present evidence that this was in use so early as 1547, we must consider the possibility that the derivation was cater sb. + cousin, perh. as = catering cousin: cf. esp. foster-father, -mother, -brother, -sister, etc.]
A term formerly applied to persons on terms of cousinship, intimate friendship, or familiarity with each other, who, though not cousins by blood, were next cousins in some respect, or perhaps called each other cousin from some community of life, interests or employments (cf. COUSIN, to CALL cousins 17 b.). To be (or be made) cater cousins: to be good friends, to be on the best of terms. It still survives as a traditional expression (chiefly from Shakespeare), but without any distinct notion of its intrinsic meaning.
1547. Latimer, Serm. & Rem. (1845), 425. Corrupt nature [is] against the will of God; and so to be natural may seem to be cater-cousin, or cousin-germain with to be diabolical.
1583. Stubbes, Anat. Abus., II. 24. Of Drapers I haue little to say, sauing that I thinke them cater cosins, or cosin germans to merchants.
1596. Shaks., Merch. V., II. ii. 139. His Maister and he (sauing your worships reuerence) are scarce catercosins.
1598. R. Bernard, trans. Terences Andria, V. ii. 92. They are not now cater-cousins [inimicitia est inter eos].
1599. Nashe, Lenten Stuffe (1871), 24. Not that it is sib, or cater-cousin to any mongrel Democratia.
1600. J. Darrell, Detection S. Harsnet, 202. One falling out with her as she was at Meate had lyke to have been choaked untill Alice and shee were made Cater-cousins, and then loe she was as well as might be.
1622. Mabbe, trans. Alemans Guzman dAlf., I. (1630), 62. I was not halfe Cater-cousins with him, because by his Meanes I had lost my Cloake.
1650. A. B., Mutat. Polemo, 8. Cats and Dogs will sooner be cater-cosins.
1680. Dryden, Kind Keeper, III. i. (1690), 29 She and I have been Cater-Cousins in our Youth; we have tumbled together between a pair of Sheets.
1702. S. Parker, trans. Tullys De Finibus, 247. The Stoicks are so far Cater-Cousins to these Philosophers, that they confine the Summum Bonum to Vertue.
1857. Sir F. Palgrave, Norm. & Eng., II. 57. A Lay-rector,a Lay-abbots cater-cousin,at the present day.
1876. Browning, Pacchiarotto, 52. Proving you were cater-cousins, kith and kindred, king and you!
Hence Cater-cousinship.
1870. Lowell, Study Wind., 102. There is something nearer than cater-cousinship in a certain impetuous audacity of temper common to them both.