We'd assume that the prefix "in" makes it a negative, as in "incorrect" or "incoherent", but it doesn't. According to The Word Detective:
In the beginning, there was "inflammable," a perfectly nice English word based on the Latin "inflammare," meaning "to kindle," from "in" (in) plus "flamma" (flame). "Inflammable" became standard English in the 16th century. So far, so good.
Comes the 19th century, and some well-meaning soul dreamt up the word "flammable," basing it on a slightly different Latin word, "flammare," meaning "to set on fire." There was nothing terribly wrong with "flammable," but it never really caught on. After all, we already had "inflammable," so "flammable" pretty much died out in the 1800's.
After World War Two, safety officials on both sides of the Atlantic decided that folks were too likely to see "inflammable" and decide that the word meant "fireproof," so various agencies set about encouraging the revival of "flammable" as a substitute.
I think that was a good decision because few people know Latin concepts (not even moi). It's not like they say, "Oh, that's based on the Latin word "inflammare!" They just want a quick understanding, no extra analysis.