Folk is one of the Germanic roots that mean "(of) the people" or "our people" (as opposed to different clans, tribes, or nations). The English word folk has cognates in most of the other Germanic languages. Folk may be a Germanic root that is unique to the Germanic languages, and not derived directly from Indo-European; though some non-Germanic cognates such as Latin vulgus, "the common people", have been suggested.
'Folks' in the plural and in the way you seem to mean it...ie close family as in, "I'm spending this weekend with my folks" has been used in that way in Britain since the 1700s.