embassy: [16] Ultimately, embassy comes from the same source as ambassador, the Vulgar Latin verb *ambactiāre ‘go on a mission’ (a derivative, via a rather circuitous route, of Latin ambactus ‘vassal’, which was of Celtic origin). From the verb was derived the Old French noun ambassade, which was borrowed into English in the 15th century but was gradually supplanted from the 16th century onwards by embassy, acquired from another Old French derivative ambassee. => ambassador
embassy (n.)
1570s, "position of an ambassador," from Middle French embassee "mission, charge, office of ambassador," Old French ambassee, from Italian ambasciata, from Old Provençal ambaisada "office of ambassador," from Gaulish *ambactos "dependant, vassal," literally "one going around," from PIE *amb(i)-ag-to, from *ambi- (see ambi-) + *ambi- "around" (see ambi-) + *ag- "to drive, move" (see act (n.)).
Meaning "official residence and retinue of an ambassador" is from 1764. In earlier use were embassade (late 15c.), ambassade (early 15c.), from Old French variant ambassade.