American Dictionary of the English Language

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CHIP, CHEAP, CHIPPING, in the names of places, imply a market; from Sax. Ceapan, cypan, to buy or sell. [See Cheap.]

CHIP, noun

1. A piece of wood or other substance, separated from a body by cutting instrument, particularly by an ax. It is used also for a piece of stone separated by a chisel or other instrument, in hewing.

2. A fragment or piece broken off; a small piece.

CHIP, verb transitive To cut into small pieces, or chips; to diminish by cutting away a little at a time, or in small pieces; to hew.

CHIP, verb intransitive To break or fly off in small pieces, as in potters ware.