The first piece once named bones, the fuel in a bonefire.
Middle English bonefire combined bon, bone, with fire. The modern word has a broader use for a large outdoor fire, while the spelling keeps a compressed reminder of the earlier compound.
Sources
- Merriam-Webster: bonfire
Word History explicitly gives bonefire and bon meaning bone.
- Online Etymology Dictionary: bone
Also built on bone (Middle English bon): backbone, jawbone.