The noun wet blanket designates:
– (literally) a blanket dampened with water so as to extinguish a fire;
– (figuratively) a person or thing that has a subduing or inhibiting effect.

This noun occurs, for example, in the review of Notting Hill (1999), a romantic-comedy film starring Julia Roberts and Hugh Grant—review by Jackie Newton, published in the Liverpool Echo (Liverpool, Merseyside, England) of Friday 21^st May 1999:

It’s difficult to watch the first half hour of this film without developing a violent urge to slap Hugh Grant very hard.
If the film has a fault it is in initially convincing us that a stunning world superstar (Julia Roberts) would be so taken with such a pathetically ponderous wet blanket. Did she lose a particularly needy puppy as a little girl or something?

The noun wet blanket is first recorded in Orders to bee obserued by the Commanders of the Fleete, and land Companies, vnder the charge and conduct of S^r. Walter Rauleigh Knight, bound for the South parts of America or else where. Giuen at Plimouth in Deuon. the third of May. 1617., published in Nevves of S^r. Walter Rauleigh. With the true Description of Guiana: As also a Relation of the excellent Gouernment, and much hope of the prosperity of the Voyage. Sent from a Gentleman of his Fleet, to a most especiall Friend of his in London. From the Riuer of Caliana, on the Coast of Guiana, Novemb. 17. 1617. (London: Printed for H. G. and are to be sold by I. Wright, 1618):

An Officer or two shall bee appointed to take care that no loose pouder bee carried betweene the Decks, or neere any linstocke, or match in hand: you shall saw diuers Hogs-heads in two parts, and filled with water, set them aloft the Deckes: you shall deuide your Carpenters some in the hold, ( if any shot come betweene wind and water) and the rest betweene the Decks, with plates of lead, plugs, with all things necessary laid by them: you shall also lay by your tubs of water, certaine wet blankets to cast vpon and choke any fire.

Before it came to be used figuratively, the noun wet blanket occasionally occurred as a term of comparison—these are two examples:

1-: From Epistle to Lord Melcomb, by Mr. R—d B—y, published in The St. James’s Magazine (London, England) of March 1763:

In the next reigns how could it flourish much?
Bigotry, revolution, and the Dutch,
Dampt, like wet blankets, its aspiring flame,
And, if not quite extinguish’d, kept it tame.

2-: From The Fashionable Lover; a Comedy: As it is acted at the Theatre-Royal in Drury-Lane (London: Printed for W. Griffin, 1772), by the English playwright Richard Cumberland (1732-1811):

Tedious! ay, in coot truth is he, as tedious as a Lapland winter, and as melancholy too; his crotchets, and his humours damp all mirth and merriment, as a wet blanket does a fire: he is the very night-mare of society.

The earliest figurative uses of the noun wet blanket that I have found are as follows, in chronological order:

1-: From a letter on conversation that “a Blackguard” wrote “To the Author of The Gentleman”, published in The Universal Magazine of Knowledge and Pleasure (London, England) of September 1775:

Conversation was intended as a kind of traffic of mental commodities, but no-body now dare open their budget: And, lest Nature should set some tongues a going, the puppies of the world have, from time to time, contrived to put a kind of gag in our mouths, by inventing certain terms calculated to turn every man to ridicule, who will venture to deliver his sentiments, or disclose his mind for the information or entertainment of the company. If you attempt to tell a story, one puppy puts his hand to his cheek, and cries Patch! implying, it seems, that the tale is old, and smells of Joe Miller; and, if you continue your narration a minute and a half, another puppy turns to a monkey next him, and whispers, ‘what a Bore! or Boar!’ for I don’t know how they spell their nonsense; but (take it which way you will) it is intended to convey an idea of tediousness, and to compare the speaker to a hog or a gimlet: But sure, Sir, such wretches are themselves the greatest enemies to good company; mere dampers to the mind, wet blankets to the imagination, and extinguishers of good sense and good humour.

2-: From Sketches from Nature; Taken, and Coloured, in a Journey to Margate (London: Printed for J. Dodsley, 1779), by the English author George Keate (1729-1797):

Fond of female converse, and possessing brisk spirits, and imagination, I have been perpetually nursing up attachments till they kindled into a flame; but there was ever some greedy father, capricious old aunt, or miserable wretch, in the way, who served as a wet blanket to stifle its progress.

The figurative use of the noun wet blanket gave rise to the verb wet-blanket, which means: to have a subduing or inhibiting effect on (a person or thing).

The earliest occurrences of this verb that I have found is from The Lancaster Gazette (Lancaster, Lancashire, England) of Saturday 11^th May 1844:

If noble lords or honorable gentlemen, sitting on the opposition benches of parliament, have ever permitted themselves to be flattered by the hope that something favorable to their party might haply arise out of the differences existing between her Majesty’s ministers and the Directors of the East India Company, all such hopes are wet-blanketed to the very death.

And the earliest occurrence of the verbal noun wet-blanketing that I have found is from Causes in aid of the Reform Bill. The ricketty policy of France, published in The News (London, England) of Sunday 17^th April 1831:

After a tremendous demonstration of the power of Revolution, France has suddenly become a non-conductor of the explosive element: and though every nation around her be rife with combustion, she remains in the centre of the awful circle, begirt as with a talismanic torpor, in the wet blanketing of a new school and order of legitimacy.

—Cf. also:
– origin of ‘blanket’ and of phrases containing ‘blanket’
– origin of ‘Linus blanket’ (security blanket)