|A visual depiction of free energy, as a type of thermodynamic potential, as compared to gravity, as a type of potential energy, showing that just as the potential energy in the gravitational field "drives" the boulder until it reaches a state of minimum potential energy in the valley, so to does the free energy "drive", in the form of a driving force, the reaction towards its "equilibrium position" in the valley of thermodynamic stability. |
The term was introduced in 1853 by Scottish engineer William Rankine. The phrase potential energy denotes all relations among bodies, or the parts of bodies, which consist in a power of doing work dependent on mutual configurations.  Types of potential energies, according to Rankine, are the mechanical powers of gravitation, elasticity, chemical affinity, statical electricity, and magnetism.
The term “potential energy”, originally called potential or latent energy, was coined in 1853 by Scottish engineer and physicist William Rankine in a paper titled “On the General Law of the Transformation of Energy”.  The quantity of potential energy, according to Rankine, originates in and forms part of the subject of the thirty-ninth proposition of English physicist Isaac Newton’s 1686 Principia.  In 1867, following criticism of the term by English mathematician John Herschel, who stated that “[the phrase] potential energy is unfortunate, inasmuch as it goes to substitute a truism for the announcement of a great dynamical fact”, Rankine defended and discussed his reasons for his introductions of the phrase.  Specifically, on the logic of English physicist Thomas Young who introduced the term energy in 1807, Rankine stated that: 
“It appeared to me, therefore, that what remained to be done, was to qualify the noun ‘energy’ by appropriate adjectives, so as to distinguish between energy of activity and energy of configuration. The well-known pair of antithetical adjectives ‘actual’ and ‘potential’, seemed exactly suited for that purpose; and I accordingly proposed the phrases ‘actual energy’ and ‘potential energy’.”
Rankine notes further that he was encouraged to preserve in the use of these phrases by virtue of their being immediately approved of by Scottish physicist William Thomson and a professor Baden Powell.
With the introduction of the conception of the “field” by English chemist Michael Faraday and Scottish physicist James Maxwell in the 1860s, potential energy soon came to signify the energy possesed by a body by virtue of its position in a field, gravitational, magnetic, or electrical, etc. The typical example being the potential energy of a body in a gravitational field. For the case of a body of mass m at a height h above the surface of the earth, the potential energy is defined as:
E = mgh
where g is the gravity. In more detail, provided that the field has no effect on the microscopic properties of the body or system, such as typically the case with the gravitational field, the potential energy of a system placed in such an external field contributes only to the external energy of the body. In the case of a magnetic field inducing a magnetization or an electric field, inducing polarization of the material, a fraction of the potential energy contributes to the internal energy of the system. 
1. Rankine, William. (1853). “On the General Law of the Transformation of Energy”, read before the Philosophical Society of Glasgow, on the 5th of January and published in the Proceedings of that Society, Vol. III, No. V.
2. Rankine, William. (1867). “On the Phrase ‘Potential Energy’, and on the Definitions of Physical Quantities”, read before the Philosophical Society of Glasgow on Jan 23 and published in the Proceedings of that Society, Vol. VI, No. III.
3. Perrot, Pierre. (1998). A to Z of Thermodynamics, Oxford: Oxford University Press.
4. Brown, Theodore L., LeMay, H. Eugene, Burstein, Bruce, and Burdge, Julia R. (2003). Chemistry (pg. 755). Prentice Hall.
● Potential energy – Wikipedia.