Ever since I came to US, I've always wondered why the Americans call the main sofa room the "living room." In India, we just refer to it as the "hall." Additionally, I encountered the "family room" and the "great room" during my four years in NJ. While the American living room doesn't have a television or an entertainment system if the house has a family room or better yet, a great room, the purpose and setting of these rooms is pretty much the same as the Indian "hall."
Nevertheless, the term family room made logical sense to me since the family would often gather around in this room after meals to watch TV or play boardgames. In case the room was huge, it was apt to call it the "great" room. Yet why call something the living room? It's not like there's another room called the dead room that people need to differentiate against.
Actually there is, rather, was. It was called the "parlour" and "in the late nineteenth century, the body of a member of the household who had recently deceased would be laid out in the parlour while funeral preparations were made." In modern homes, the parlour has been replaced by the living room "as a result of a twentieth-century effort by architects and builders to strip the parlour of its burial and mourning associations." Now one wonders, what made the architects scratch off the centuries old tradition of parlour from their blueprints?
I have a simple method to determine the cause of seemingly unexplainable societal movements - look for the industry that would benefit from the drastic change. In this case, Penn & Teller helped me out with their Death. Inc. episode. That industry is funeral homes. Funeral homes were not so common two centuries ago because every house had a parlour and only the ones without parlours would avail of their funeral services. So obviously, over the course of a few decades, the funeral home owners persuaded the builders to wipe out the parlour and replace it with something else. It was only a matter of time till some marketing genuis came up with the term "living room" to replace the parlour.
Enough history lessons. I'm gonna go watch TV in my living room now :)