(NSFW) What is the history of this word?

I am currently watching a show called Soap which is a sitcom that started in 1977 and ended in 1981. This show pretty much makes fun of soap operas by exaggerating the events all over the place.
Anyways one of the characters in this is a homosexual, and in one episode I just watched, while the gay man is gone, someone refers to him as a ’‘faggot’’.

I was pretty shocked. Not that I’ve never heard that word before, and some of you may know, I do have a passion for cussing, slangs and their history. Except ever since I’ve known of this word, I’ve always known that it was very offending to many.
But in this show they used it, and the audience laughed. So what is the deal with this? Was there a time where saying that was normal? Kind of like the word ’‘nigger’’ back when it was okay to treat black folk as less than human? I realize that the acceptance of homosexuals is very recent, and nowhere near perfect, so my only guess is that back when it was peddled as a fact that gays were no good, using anything to offend them was okay in many ways.
Does that have anything to do with it? But one reason I am very confused is because the show does not give you the impression that being gay is bad besides some characters being scared of the idea, yet they pop up with this here word. :/

And truth be told, before I heard that word in a movie called The Warriors, I thought it was a modern word. :/ But I guess not, and this show I’m watching now only reminds me of this. The show also often uses another word, whenever the gay dude is around, called ’‘fegular’’ or ’‘fagular’’. I tried looking that up, and can find nothing at all about it.

So what is the history behind the word ’‘faggot’’? I know that in England it’s a log of wood, but besides that…I know nothing. Why was it acceptable back then?

And please don’t get the wrong idea, I’m not asking this to make fun of gays or anything like that. I am just very curious. Any online sources to recommend? Where does it come from, what other word is it using to relate itself to gays? From when does it orignate?