If something is cancelled, it's been called off. That's usually a bad thing, but if your flight home from Paris gets cancelled due to weather, consider yourself lucky to have another day of vacation!
You're thrilled to hear work has been cancelled due to a power outage, but definitely not so happy when your date calls to cancel. Cancelled comes from the Latin word cancellare, which means "to make resemble a lattice" — that fencing with all the crisscrossed wood pieces. So originally, something that was cancelled had been crossed out with lattice-like lines, just like you'd mark an appointment on the calendar that's been rescheduled.