The story goes that this colloquialism for "grand or luxurious" was an acronym for "port outward, starboard home," used in the old days of regular steamship travel between England and India.
Britons supposedly preferred cabins on the port side when they left home because that was the cooler side of the ship as it passed through the Indian Ocean. Returning home, they chose cabins on the right or starboard side for the same reason.
According to this pleasant, popular, and incorrect explanation, such a choice became synonymous with elegance. No solid evidence has been found to support this etymology.
Word-trackers offer three other explanations: Posh may have begun life as a typo in a 1918 issue of Punch magazine. P.G. Wodehouse had used "push" to mean "fashionable" in "Tales of St. Austin" (1903).
But "posh," meaning dandy or fop dates back at least to 1867. It may be derived from Romany, the language spoken by the Rom (gypsies), where "posh" means "half" and is used with monetary terms. Or is posh simply a contraction of "polish"?
SOURCES: The Encyclopedia of Word and Phrase Origins by Robert Hendrickson, Brewer's Dictionary of Fact and Fable by Ivor H. Evans; www.wordorigins.org.