Board Thread:General Discussion/@comment-82.15.119.118-20160629073354/@comment-78.18.163.141-20160630234746

Alchemy is as previously posted the predicessor to Chemistry. It was first known by that name  by ancient English and Celtic Druids, the scientists of their day. It mostly revolved around the mixing of chemicals and liquids to create "potions" ( ie. Medicine). Over time as Druids became less common they fell into mythology as being evil magic users who made poisons and cast evil spells, a falsehood that was often used in books to make them the bad guys.

Many of todays genuine herbal medicines can be traced back to those druids but unfortunatly so can many poisons and extremely dangerous liquids such as Spanish Fire ( WildFire as it is now commonly known due to Game of Thrones )

So the use of the word in TES is quite accurate :)