* "Make" refers to the act of creating or preparing something.
* "Up" is a preposition that can indicate a change in state or improvement.
So, "makeup" literally means to "make up" or "improve" one's appearance. It suggests the process of using cosmetics to enhance or change one's natural features.
This term has been used in relation to cosmetics since the 18th century, and its meaning hasn't changed much over time.