Why is the left side of a ship called 'port'?

Answer

The right side, 'starboard', comes from 'steerboard'.

Context

Starboard comes from the Old English steorbord, meaning the 'steering side'. Northern European ships used a side-mounted steering oar, and because most people are right-handed it was placed on the right. Since the oar projected from that side, vessels usually tied up to a quay with their left side, so the side facing the dock became the one used for loading.

The left side was called bæcbord in Old English and larboard in later English, with larboard perhaps derived from a term meaning the loading side. 'Port' was sometimes used as well, probably because of the harbour side. The Royal Museums Greenwich account notes that 'larboard' sounded too much like 'starboard', particularly when shouted over wind and waves.

That confusion led navies to formalize 'port' in the mid-19th century. Admiral William Henry Smyth's Sailor's Word Book of 1867 records the preference for port as less mistakable in sound. The US Navy issued a general order on the matter in 1846. The derivation is well supported, though some details, such as the exact origin of larboard, are debated by lexicographers.

A common misconception is that port and starboard refer to directions from the speaker. They are fixed to the vessel, so port is always left when facing the bow, whichever way a person stands.