From the second edition (1989):
(ˈɛmpəθɪ) [tr. G. Einfühlung (see einfühlung) (T. Lipps Leitfaden d. Psychol. (1903) 187), ad. Gr. ἐµπάθεια.]

The power of projecting one's personality into (and so fully comprehending) the object of contemplation.

1904 ‘V. Lee’ Diary 20 Feb. in ‘Lee’ & Anstruther-Thompson Beauty & Ugliness (1912) 337 Passing on to the æsthetic empathy (Einfühlung), or more properly the æsthetic sympathetic feeling of that act of erecting and spreading. 1909 E. B. Titchener Lect. Exper. Psychol. Thought-Processes i. 21 Not only do I see gravity and modesty and pride‥but I feel or act them in the mind's muscles. This is, I suppose, a simple case of empathy, if we may coin that term as a rendering of Einfühlung. Ibid. v. 185 All such ‘feelings’‥normally take the form, in my experience, of motor empathy. 1912 Academy 17 Aug. 209/2 [Lipps] propounded the theory that the appreciation of a work of art depended upon the capacity of the spectator to project his personality into the object of contemplation. One had to ‘feel oneself into it’.‥ This mental process he called by the name of Einfühlung, or, as it has been translated, Empathy. 1913 J. M. Baldwin Hist. Psychol. II. 126 ‘Æsthetic semblance’ is the equivalent of ‘empathy’. 1925, 1929 [see einfühlung]. 1928 ‘R. West’ Strange Necessity 102 The active power of empathy which makes the creative artist, or the passive power of empathy which makes the appreciator of art. 1955 D. Davie Articulate Energy iii. 30 This is a silent music, a matter of tensions and resolutions, of movements (but again not rhythmical movements) sustained or broken, of ease or effort, rapidity or languor. What we mean, in fact, is empathy. 1958 C. P. Snow Conscience of Rich xxxiii. 240 It was not only consideration and empathy that held him back. 1963 R. L. Katz Empathy i. 8 It is true that in both sympathy and empathy we permit our feelings for others to become involved.