Back when type was made of bits of lead rather than bits of zeroes, ones, and light, the procedure from which we take our name was used by craftspersons (called punchcutters) who cut and carved letterforms into steel. These steel punches were used to create matrices, the original molds for a typeface to be cast in lead and to be used in letterpress printing.

The punchcutter would carve the initial shape of a letter onto the tip of a steel rod, called the punch. This punch was then hammered onto the tip of another blank punch, thereby creating the negative form of that shape; additonal shapes were then carved, and this punch, depending on the letter, could be used to create yet another negative form in another punch. Interior spaces (counters) in letterforms were made by “counterpunches,” heat-tempered punches that had the positive shape carved on their tip, which were then hammered into the master letterform punch. When the final letterform was ready, the punch would be held over the flame of a candle to heat the surface. Then, the candle would be extinguished, and the punch would be held in the resulting smoke, which adhered to the surface of the punch. This smoky punch was then pressed onto a piece of paper, and the punchcutter could then test and check the integrity of the letterform, “printed,” as it were, on the paper. This print was referred to as a

Wikipedia has a nice description of this process. For an in-depth look at punchcutting, Fred Smeijers’ book Counterpunch: Making Type in the Sixteenth Century is an excellent, well-researched resource.