From Dr. Bill [wwh]:

'irony'. In the first place, there is no 'iron' in it.

irony
1502, from L. ironia, from Gk. eironeia, from eiron "dissembler," perhaps related to eirein "to speak" (see verb). Used in Gk. of affected ignorance, especially that of Socrates. For nuances of usage, see humor

And it need not 'bite the flesh' as sarcasm does.