According to Oxford English Dictionary (
http://www.oed.com) it is from the French, carameliser, which is from Spanish, caramelo, of uncertain origin.
[a. F. caramel, ad. Sp. (It., Pg.) caramelo, of uncertain origin.
Scheler suggests that the Sp. represents L. calamellus little tube, in reference to its tubular form; Mahn thinks it from med.L. cannamella sugar-cane: an Arabic source is conjectured by Littré.]
a. A black or brown porous substance obtained by heating sugar to about 210° C., by which it loses two equivalents of water; burnt sugar. It is used for colouring spirits, etc. b. A kind of ‘candy’ or sweet. c. attrib. as caramel-walnuts.
d. The colour of caramel brown. Also attrib.
Hence caramel v. trans. and intr., caramelize v. [cf. F. caraméliser], trans. and intr., to turn into caramel.
First reference in English Literature 1725, more than fifty years
before the birth of Chef Marie-Antoine Carême (born 1783 - died 1833)
The OED has two citations for "caramel" that pre-date Careme:
1725 BRADLEY Fam. Dict. s.v. Sugar, When it is boiled to Caramel, it breaks and cracks.
1727 BRADLEY Fam. Dict. s.v. Apple, Let it boil so long till the Sugar be red enough and caramel'd.
Larousse Gastronomique says it comes from the Latin Cannamella (sugar cane).
Alain Ducasse New York sent out material earlier that had caramel mentioned in it. And they had mentioned (my memory could be failing me) caramel finding its roots back to Sanskrit. And now reading the Latin word cannamella, I can understand what those Sanskrit roots are. We call sugar cane Ganna and Maila means dirty (color of dirt). And that makes perfect sense.
And the common American pronunciation or spelling are no where to be found in Larousse either.
References trace it back via Spanish to a Latin origin.
Sorry, but Monsieur Careme can't take credit for this one.
Ref 
Origin of term caramelize 
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