AFAIK, the concept first appeared in the dystopian sci-fi novel The Shockwave Rider written by John Brunner back in the 70's. It was called a Delphi Pool in that. Great book, btw. Though unfortunately another example of tech-bros old dystopian novels as a model to build a business.

The description of it from the book:

It works, approximately, like this.

First you corner a large - if possible, a very large - number of people who, while they've never formally studied the subject you're going to ask them about and hence are unlikely to recall the correct answer, are nonetheless plugged into the culture to which the question relates.

Then you ask them, as it might be, to estimate how many people died in the great influenza epidemic which followed World War I...

Curiously, when you consolidate their replies they tend to cluster around the actual figure as recorded in almanacs, yearbooks and statical returns.

It's rather as though this paradox has proved true: that while nobody knows what's going on around here, everybody knows what's going on around here.

Well, if it works for the past, why can't it work for the future? Three hundred million people with access to the integrated North American data-net is a nice big number of potential consultees.

And here's how the concept was used in the real world (before polymarket), according to this source:

Perhaps the most striking attempt to make use of this kind of idea was the Policy Analysis Market (PAM), a proposed futures exchange developed by our friends at the Defense Advanced Research Projects Agency (DARPA). PAM was intended to be a kind of "futures market" for the Middle East; investors could trade futures based on political outcomes in the region.

The idea is that the monetary value of a particular "future" (a stated outcome in Middle East politics) would tend to increase as the outcome became more likely. That is, the value of a futures issue would tend to reflect the relative likelihood of that future actually occurring.

Unfortunately, it turned out that PAM would allow trading in such events as coup d'etats and assassinations; the resulting uproar caused the cancellation of PAM.

The Delphi method was used in the late 1940's at the RAND Corporation. In their implementation, a panel of experts was regularly polled by a facilitator to predict future outcomes of events related to the Cold War. Brunner probably derives his Delphi pool idea from this work.

The name "Delphi pool" is derived from the pythia, or priestesses, of Delphi in ancient Greece. The pythia would take questions and make predictions (which modern-day geologists attribute to hydrocarbon gasses like ethylene, which bubbled up from the faults in the region).