wikipedia:
From Italian fiasco (“‘bottle, flask’”) - the type of round wine bottle, sometimes wrapped in straw, used traditionally for Chianti wine. The failure sense specifically derives via French from the Italian phrase fare fiasco, literally meaning “make a bottle” (used in Italian theatre to mean “failure in a performance”). This is similar to the informal British English usage of "to bottle out" meaning to "lose one's nerve".
An alternative interpretation of the Italian "far fiasco" as a meaning for failure can be traced to production of glass bottles by glass blowing. A mistake in the process would result in a bottle of irregular shape with protruding or enlarged base is termed "fiasco" as opposed to "bottiglia"
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