Ancient inheritance of dualism, that mortal life was a union between spirit and flesh; this union being the whole person. And when one was besieged with illness and hammered too hard by woe, he would finally "give up the ghost", meaning, surrender the fight and let the spirit depart from the body, or succumb.

It is also used metaphorically for other kinds of battles that one quits on after they become too much, but the original meaning is the above.

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