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Set

Words that look like they're related sometimes aren't. More to the point, your parents and grandparents may have had the same confusion, and their confusion changed the meanings (and sometimes spelling) of the originally separate words. This is called "folk etymology."
 

"Set" has a world of meanings, and all of them are a little fuzzy. In most of its verb meanings, "set" means (roughly) "place" or some variation. E.g., Set (place) the box down, set the hen to the eggs, set (adjust) the thermostat. In noun forms, however, "set" frequently means an assembly of items--such as chess set, television set. These senses seem unrelated, and it turns out that that's exactly right. Set (to place) is from OE settan (IE *sed-), which was a form of "sit." Set (a group) is from OF<L secta (same word as SECT, a group of believers), meaning group. In English, the two words have been somewhat confused, so that "set" (group) has come to have the sense of a group set together.
 

"Sect" (group) has been even more confused. The word started off (in L.) just meaning a group united by common interest, from (L.) sequi "follow". (Compare "sequel.") But it was a homonym to a word meaning divide (compare "bisect," "dissect," "section"). This similarity (confusion) has caused "sect" to take on the idea of separation or division. So, a sect is now (usually) a part of a larger group, distinguished by some different belief or practice.