means A continuous twisted strand of fibers used for knitting, weaving, or sewing — and, by happy extension, a long, drawn-out story.

from From Old English 'gearn,' spun fiber, a thread that runs back through Germanic kin (Old Norse 'garn,' German 'Garn') and possibly even further to a Proto-Indo-European root meaning 'gut' or 'entrails' — the original spun cords. The storytelling sense is a sailors' gift: bored crews would 'spin a yarn' while doing the tedious work of twisting rope and mending lines, swapping tall tales to pass the watch. The thread you twisted and the story you told became, fittingly, the same word.