The words 'politically' & 'correct' had, of course, been used together before the last century - the earliest example given in Wikipedia is 1793 - but always in their literal sense, to highlight a logical fallacy about a political statement, not as a criticism of thinking outside of the state's current position on a given matter, or of use of language that others may find upsetting: "The term previously used 'correctness' in its literal sense and without any particular reference to language that might be considered offensive or discriminatory."
Ruth Perry, in her "A Short History of the term 'Politically Correct'" (1992) traces the now accepted use of the term back to the 1960's & Chairman Mao's Little Red Book: "It probably came into the New Left vocabulary through translations of Mao Tse-tung's writing". Others agree with when & through which channels it entered western culture but place the origin of the phrase with Trotsky. I found a good synopsis of its use since then at the website The Karl Hess Club which I will reproduce here in full:
"PC" has gone through four stages of meaning. "Politically correct" was initially coined by Leon Trotsky to refer favorably to those whose views remained in sync with the ever-shifting Bolshevik Party line. This was important, as "not PC" people risked prison or death.
"Politically correct" was revived (and again, used favorably) by 1960s New Left radicals who fancied themselves revolutionaries in the mold of Che, Castro, and Mao. "Politically correct" was first used negatively by 1980s conservatives, following the publication of Allan Bloom's Closing of the American Mind. Conservatives embraced the term "politically incorrect" as a badge of honor to contrast their championing of free speech against campus leftists who used speech codes to suppress debate on sensitive topics. This was also when the term first became widely known by its acronym, "PC." In these three previous stages, everyone agreed that PC meant Left, and "not PC" meant Right. But because liberals don't like a reputation of being anti-free speech, within a few years they did a turnabout, and called their opponents "PC" and themselves "not PC." Bill Maher's Politically Incorrect is representative of this fourth stage, creating the odd result of a self-proclaimed "not PC" show winning a very PC environmental media award.
However, despite liberals' turnabout, conservatives continued to refer to themselves too as "not PC." Thus "PC" has lost any specific meaning in this fourth stage, since everyone defines their position as the now chic "not PC," and their opponents as "PC." (A far cry from the days when Russians dreaded the Chekists who executed "not PC" people.)
What Political Correctness really means - wherever & in whatever form it appears - is this: that The State or similar authority (the Church, society, any dominant ideology, it doesn't matter which) has decided what you can or cannot think or say. It has decided this for you. Its definition is the one you must accept. Your opinion is wrong. Your opinion should not be heard. Your opinion is Incorrect.