parlor (n.) c. 1300, parlur, "apartment in a monastery for conversations with outside persons," earlier "window through which confessions were made" (c. 1200), from Old French parleor "courtroom, judgment hall, auditorium" (12c., Modern French parloir ), from parler "to speak" (see parley (n.)).

It is actually from French. What's more, it was taken from the word "parler," to speak, which is quite fitting for a room in which you hosted your guests! Parlor is the room where the funeral service was held, where guests would come to pay last respects to the deceased; thus the most showy room for receiving guests.