The term “stool pigeon” means: An informer or telltale; a decoy used by the police to trap a wrongdoer.
The term is neither new nor recent.
In the literal sense of a decoy pigeon it was in use by American hunters early in the nineteenth century. And fowlers also used the term “stool-crow,” a similar decoy for crows.
It is fairly certain that stool as used here was formerly written stale, which also meant a living bird used to attract others of its kind.
Thus, for example, we have in Shakespeare’s The Tempest (1611), IV, 1, “The trumpery in my house, goe bring it hither For stale to catch these theeues.”
And this in turn was a variation in the same period of stall, as in lines from the so-called Chester Whitsun Plays (c. 1500), “Send forth women of thie countrye, namely those that beautifull be, and to thie Enemyes lett them draw nye, as stalles to stand them before.”