The noun is borrowed from Chinook Jargon potlatch, pátlač (“to give; gift; gift-giving ceremony, potlatch”), from Nootka Jargon pa'chatle, pa'chēētle, pah-chilt (“to give, give me”), from Nootka p̕ačiƛ (“to give a gift during a potlatch ceremony”).
Sense 1 of the verb (“to give; especially, to give a gift during a potlatch ceremony”) is borrowed from Chinook Jargon potlatch, pátlač (see above); sense 2 (“to carry out or take part in a potlatch ceremony”) is derived from the noun.