To devastate, though the Latin original meant something oddly precise: kill exactly one man in ten.
Documented
Decimatio, the tenth man's lot
Latin decimare, from decem (ten): the attested Roman discipline of executing one in ten soldiers of a mutinous or cowardly cohort, practiced under Crassus and threatened by others. English borrowed it in the 1600s meaning tithe or tenth, then slid toward general slaughter by the 19th century.
Assessment: Documented: Roman historians describe the practice; the semantic slide is dated in dictionaries.
Stories
The pedant's hill
The usage wars: purists insist decimate must mean reduce by a tenth, journalists use it for near-total ruin, and each side cites Rome. Meanwhile the Romans themselves used it loosely; even Livy stretched it.
Assessment: Stories: the strict reading is a Victorian reconstruction, not Roman practice.
Interesting claims
Ten as the unit of order
Why ten: the decem root runs through decimal, dean (leader of ten), dime, and December, once the tenth month. Decimation is what happens when counting itself becomes an instrument of discipline.
Assessment: Interesting: the *dekm root is Proto-Indo-European; punishment by arithmetic is purely Roman.
Sources and further reading
Livy, Ab Urbe Condita, on decimatio discipline
Oxford English Dictionary, 'decimate,' semantic history
Polybius, Histories 6.38, on Roman military punishments
Worth asking
If the word always meant ten percent, who authorized the other ninety?