Since the 1600s, the verb 'to wet' has meant to celebrate by drinking. A soldier, for example, would �wet his commission'...ie celebrate his being promoted to officer rank by having drinks with colleagues. The earliest use of 'wet the baby's head', as such, dates only to the 19th century. When a baby is baptised in church, its head is literally 'wetted' by the priest using water from the baptismal font, so the custom of fathers inviting friends to 'wet the baby's head' is just a sort of non-religious baptism-like celebration.