This article is from the alt.usage.english FAQ, by Mark Israel email@example.com with numerous contributions by others.
"Impact", which comes from Latin "impactus", past participle of
"impingere" = "to push against", is first recorded in English in
1601 in the form of the past participle, "impacted". The verb "to
impact", meaning "to press closely into or in something", dates from
1791. The noun "impact" dates from 1781. The (undisputed)
expression "impacted wisdom tooth" dates from 1876.
There is another English verb derived from Latin "impingere":
"to impinge", first recorded in 1605. "To impinge on" shares with
"to impact" the sense "to come sharply in contact with", and some
people consider it stylistically preferable. Unlike "to impact",
"to impinge on" has acquired the figurative sense "to encroach on",
possibly through confusion with "to infringe". This sense is
attested from 1758 on.
The usage dispute centres on the use of the verb "to impact (on)"
in the sense "to affect, to have an effect on, to influence". The
OED's earliest citations where this is clearly the sense are: for
"impact on", 1951; and for transitive "impact", 1963.
Opposition to these uses is widespread. 84% of AHD3's Usage Panel
disapproved of "social pathologies [...] that impact heavily on such
a community"; and 95% disapproved of "a potential for impacting our
health". Among the objections to such use of "impact" are that it
sounds pretentious and bureaucratic, and that it may connote to the
reader violence that the author did not intend. The latter
objection can apply also to "impact" the noun. Kenneth Hudson, in
"The Dictionary of Diseased English" (Macmillan, 1977), noted:
"'Yves St. Laurent's Triangles give even more design impact to your
bed' (Washington Star, 17.10.76) is not the happiest of sentences.
'Make a nice bed look even better' would have been more reassuring."