Wainscot: A wooden lining of an interior wall, usually panelled. 

The meaning, paneling of wood on the walls of a room, is first recorded in English in 1548 (Barnhart)  "Wain" is an Old English form of the German wagon, meaning "wagon" or "cart," and "scot" comes from the German schot, originally a type of fine oak panel. (The image on the left is adapted from Aldren Watson.)

The "wagon" connection, according to Philip Leon,  evidently is suggested by "a medieval wagon partially enclosed with Pan­els separated by Stiles," where "the lower portion [of the wagon panelling is thought to resemble] of a wainscoted room". Notice that, text box, below, right, Percy Wells and John Hooper include this same etymological information as part of their narrative on "wainscot oak"; and these same etymologocal roots are noted by Aldren A Watson, Country Furniture New York: Crowell, 1974.  

... In the Riga and Austrian oak the logs are " flitched " as in f. 6. The two planks cut from the centre produce "Wainscot" boards, but this term is applied to figured oak generally when it is cut in this way. The word is of Dutch origin, " Wagen-schot," wooden partition, or wall covering,in which the best oak was used, hence the best boards cut from a log are "wainscot" wood. The heart end of the planks are cut off when necessary. Source: Percy A. Wells and John Hooper Modern Cabinet Work, Furniture & Fitments: An Account of the Theory on Making Fine Furniture From the Golden Age of Craftsmanship.  Philadelphia: Lippincott Company, 1938

The major voice of the Arts and Crafts movement in America, Gustav Stickely's The Craftsman,  advocated wainscoted walls with a plate rail (upper right). Gustav Stickley, one of the most influential figures in the inital interst in America of the Arts and Crafts style, advocated framing around doors and windows to help define a room's structure.

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Walls and floors, [Gustav] Stickley liked to say, should express the friendliness of and permanence of wood. Believing that generous woodwork was the best enrichment for any room, he recommended covering the lower portions of walls with wainscoted panels stained to bring out the natural grain and texture and give the surface a soft, mellow finish. Above the wainscoting, the wall was textured plaster, either plain or tinted, or covered with a fabric or wallpaper that harmonized with the woodwork. Color and individuality could be further heightened by stenciling a wall with a decorative frieze, although Stickley was careful to remind his readers to use this kind of ornamentation with great restraint. The wainscoting's rectangular motifs were repeated in well-proportioned, naturally finished doors, windows, and fireplaces that became part of the wall's structural decoration. Floors were sturdy and made of durable hardwoods, their unobtrusive tones blending with the other woodwork in the house. Finished with a mixture of wax and varnish, their surfaces shone with a subtle gleam. Occasionally floors were embellished with inset geometric motifs of contrasting woods. These patterns were simple, structural, and subdued, and their ornamental value arose as much from skillful workmanship as from the modest designs themselves. With color, texture, and candid construction, the walls and floors brought a final touch of beauty and made each room "complete and satisfying" in itself. Source: David Cathers and Alexander Vertikoff, Stickley Style: Arts and Crafts Homes in the Craftsman Tradition New York:  Simon & Schuster 1999, page 46

Sources:  Aldren A Watson, Country Furniture New York: Crowell, 1974; Robert K Barnhart, ed, The Barnhart Dictionary of Etymology (New York: H W Wilson, 1988, page 1215; Percy A. Wells and John Hooper Modern Cabinet Work, Furniture & Fitments: An Account of the Theory on Making Fine Furniture From the Golden Age of Craftsmanship.  Philadelphia: Lippincott Company, 1938; David Cathers and Alexander Vertikoff, Stickley Style: Arts and Crafts Homes in the Craftsman Tradition New York:  Simon & Schuster 1999; Philip Leon, "Woodworker Meets Wordworker," Popular Woodworking April 2002, page 88.