The word is said to be derived from the chapter of the rule book: it is a custom under the Rule of Saint Benedict that monks or nuns gather daily for a meeting to discuss monastery business, hear a sermon or lecture, or receive instructions from the abbot/abbess, and as the meeting begins with a reading of a chapter from the Rule, the meeting itself acquired the name "chapter", and the place where it is held, "chapter house" or "chapter room".
The term was then extended to apply to other meetings. The term general chapter designates a monastic general assembly, usually of representatives from all of the monasteries of an order or congregation. The Chapter of Mats is the term for a similar meeting of representatives of various provinces and subgroups of the Franciscan family of communities. A chapter of faults is held regularly by many religious communities at which members are both corrected for infractions against the community's rule, or accuse themselves of their faults and ask for a penance to be prescribed (this is not the Catholic Sacrament of Penance or "Confession"—monks and nuns are generally barred from confessing actual sins in a chapter of faults, but do confess "imperfections" and minor faults in abiding by monastic rules).
From these conventual chapters or meetings of monks for the transaction of business connected with their monasteries or orders, the designation passed over to somewhat analogous assemblies of other ecclesiastics. Hence, one speaks of "collegiate chapters" and of "cathedral chapters", both of which comprise the canons connected to the cathedral or other church ("collegiate" here refers to the "college" or community of canons to whom the church has been entrusted). In general a chapter is an association of clerics of a certain church forming a moral body and instituted by ecclesiastical authority for the purpose of promoting the divine worship by means of choir service. If it be a cathedral chapter, however, its principal object is to assist the bishop in the government of his diocese, and the choir service is only secondary.