Sinister used to mean left handed. "A shambles" used to mean a slaughterhouse. Sanction used to mean allow, now it means not allow. It is fine for words to change meaning, even to their own opposite. Natural language has done that forever.
Edit: you're all right, sanction has both meanings.
"Sanction" has to be an autoantonym. To explicitly allow something is to implicitly forbid whatever is not that something, and to explicitly forbid something to implicitly allow whatever is not that something. Or, at minimum, the not that something in both cases exists in some ternary in-between state.
Thus, any word that exists in this vein is going to end up meaning what is forbidden and what is allowed.
One can sanction a country by only allowing it to trade oil, or one can sanction a country by forbidding it from trading food, clothes, and manufactured goods.
It's just the latest in a long line of adverbs for truthfulness that morph into something else. "very" (from latin for true), "really" (from real), "honestly", "truly" and so on. "Actually" seems to still hold on to some meaning but is now on the verge of becoming socially unacceptable. I guess this says something about human nature.
My Chambers dictionary suggests these alternatives: actually, really, absolutely.
It also says, "literally is in common use to intensify an idiom, and this is not incorrect".
My general rule is that usage defines meaning. If lots of people use literally as an idiom intensifier, then I'd be wrong to argue. However, my GCSE English teacher said that we need to consider the intended audience and form. Me saying, "They literally flew down the road" to my mates in the pub is fine. It is not fine in formal writing.
"Pragmatic sanction, historically, a sovereign's solemn decree which addresses a matter of primary importance and which has the force of fundamental law"
It has just been corrupted in various ways. It's no longer only a sovereign's decree, but any authority. It doesn't necessarily have primary importance. And the force it carries depends on the authority.
Edit: you're all right, sanction has both meanings.