The Origins of Wonder
The swindle of counting one more item than you actually have, through counting backward and stopping, then starting again (say, with fingers: “Ten-nine-eight-seven-six—and five more equals eleven”) has been long used openly as a joke and more subtly as a false count (most notably by Larry Jennings (e.g., Jennings '67 by Richard Kaufman, 1997, “The Six/Four Count Card to Pocket” and “The Six/Four Count Card Across”, pp. 74 & 77) and Jim Steinmeyer (e.g., “Teleportation” in Impuzzibilities, 2002, p. 27; “The Thirteen Card Dilemma” in Further Impuzzibilities, 2006, p. 23; and “The Magician Who Fools Himself” in Subsequent Impuzzibilities, 2010, p. 13).
This false count is sometimes known as the Lord Dundreary count. Dundreary was a character in the nineteenth-century play Our American Cousin. Dundreary was a dotty, clueless Englishman who convinced himself he had eleven fingers through doing this reverse counting. The gag, however, is not in the script for Our American Cousin. It was added by the actor Edward Sothern, who built a career playing the Dundreary character. Sothern was using the gag in his performances no later than 1865 (see The Illustrated London News, Oct. 14, 1865, which mentions Sothern and the bit).
The earliest published description of the count Bill Mullins has located is in George Frederick Pardon's Games for All Seasons, 1858, p. 109.