A bluff as a geographical feature is a broad cliff or bank, overlooking a body of water (or a dried up water course) which was created by erosion. A bluff is blunt, solid and strong. It is perhaps this show of strength that gives us the lie. A bluff person is somone of solid build, quiet strength, simple honesty.
A bluff as a lie is commonly used in gambling. It involves presenting a strong position to deter an opponent from meeting your bet.
In business bluffing is a frequently used technique. A seller will bluff a buyer by inferring that they have many buyers interested in the goods. A buyer will bluff the seller by inferring that this is only one of many competing offers.
Every job interview in history has involved bluffing. Interviewees bluff the employer as to the depth, success or seniority of their previous roles. Interviewers bluff the candidate with regard to the attractiveness of the role, the seniority of the role, the budgets available, the autonomy possible and so on. A certain element of bluffing is expected on both sides, but there are limits to acceptability before a bluff becomes an outright deception. A candidate can get away with inflating their previous salary by 10 or 15% to negotiate a raise from their prior role. But when they begin the job, and their taxation documentation comes across the employer will have a strong sense of the prior salary. A candidate who inflated their salary by 50% could be accused of a lie instead of a bluff, because that could represent a significant difference in seniority sufficient to exclude them from the role.
A good bluffer, a really good bluffer, is never caught in the bluff.