The following is the history of the words "FAGOT" and "PUNK"..
Back in the day when armies use the old cannons that had a fuse stuck in them to set them off there was a need to have someone carry all of the punk that held the ember used to light the fuse: like the idea of having a punk instead of a lot of matches to light the firecrackers on the 4th of July.
Anyway they picked the guys who were the dumbest ones available for the job of punk carrier. Because the stupid ones also had the tendency to be homosexual (let's always be politically correct), the words stuck for that also.
Both words also carry the implication of a dumb and stupid person. As in the phrase: Hey there, you dumb stupid fagot, bring us some punk for the cannon. 
Hey now, let's be politically correct Hillary - you can't say that! 
Why, because I said so: remember, I am the one in charge and I get to tell you what to say and how to act.
JR
Originally Posted by JRLawrence
You are so far off on this. Not everything has a military origin. Usually military stole there terms from common language.
faggot (n.1) 
late 13c., "bundle of twigs bound up," also fagald, faggald, from Old French fagot "bundle of sticks" (13c.), of uncertain origin, probably from Italian fagotto "bundle of sticks," diminutive of Vulgar Latin *facus, from Latin fascis "bundle of wood" (see
fasces).
Especially used for burning heretics (emblematic of this from 1550s), so that phrase fire and faggot was used to indicate "punishment of a heretic." Heretics who recanted were required to wear an embroidered figure of a faggot on the sleeve as an emblem and reminder of what they deserved.
faggot (n.2) "male homosexual," 1914, American English slang, probably from earlier contemptuous term for "woman" (1590s), especially an old and unpleasant one, in reference to
faggot (n.1) "bundle of sticks," as something awkward that has to be carried (compare
baggage "worthless woman," 1590s). It may also be reinforced by Yiddish faygele "homosexual" (n.), literally "little bird." It also may have roots in British public school slang noun fag "a junior who does certain duties for a senior" (1785), with suggestions of "catamite," from
fag (v.). This also spun off a verb (see
fag (v.2).
He [the prefect] used to fag me to blow the chapel organ for him. ["Boy's Own Paper," 1889]
Other obsolete British senses of faggot were "man hired into military service merely to fill out the ranks at muster" (1700) and "vote manufactured for party purposes" (1817).
The explanation that male homosexuals were called faggots because they were burned at the stake as punishment is an etymological urban legend. Burning sometimes was a punishment meted out to homosexuals in Christian Europe (on the suggestion of the Biblical fate of Sodom and Gomorrah), but in England, where parliament had made homosexuality a capital offense in 1533, hanging was the method prescribed. Use of faggot in connection with public executions had long been obscure English historical trivia by the time the word began to be used for "male homosexual" in 20th century American slang, whereas the contemptuous slang word for "woman" (in common with the other possible sources or influences listed here) was in active use early 20c., by D.H. Lawrence and James Joyce, among others.
punk (n.2) "worthless person" (especially a young hoodlum), 1917, probably from punk kid "criminal's apprentice," underworld slang first attested 1904 (with overtones of "catamite"). Ultimately from
punk (adj.) "inferior, bad" (q.v.), or else from punk "prostitute, harlot, strumpet," first recorded 1590s, of unknown origin.
For sense shift from "harlot" to "homosexual," compare
gay. By 1923 used generally for "young boy, inexperienced person" (originally in show business, as in punk day, circus slang from 1930, "day when children are admitted free"). The verb meaning "to back out of" is from 1920.
The "young criminal" sense is no doubt the inspiration in punk rock first attested 1971 (in a Dave Marsh article in "Creem," referring to Rudi "Question Mark" Martinez); popularized 1976.
If you looked different, people tried to intimidate you all the time. It was the same kind of crap you had to put up with as a hippie, when people started growing long hair. Only now it was the guys with the long hair yelling at you. You think they would have learned something. I had this extreme parrot red hair and I got hassled so much I carried a sign that said "FUCK YOU ASSHOLE." I got so tired of yelling it, I would just hold up the sign. [Bobby Startup, Philadelphia punk DJ, "Philadelphia Weekly," Oct. 10, 2001]
http://www.etymonline.com/index.php
Originally Posted by JRLawrence
Originally Posted by Luxie