I was interested in differentiatig between different usages of obj+业,for example: 企业,商业... and there it was - 行业.
So the question is "why 行 means industry and does it have something to do with it's "original" meaning "a row\line?".
My intuitive guess was it has something to do with 行会. So I looked it up and there it is: from baidu baike (although the entry is about 行会 and not 行, so everything would technically still be based on my original assumption, which isn't that bad of a guess from a native speaker's perspective):
So it turns out that during Sui/Tang dynasty, it often happened to occur that along a certain street, there were exclusively shops doing the same kind of business, and therefore the 行 (line).
I would like to add to the answers posted thus far.
For whatever reason, the question and Andrew's point on 行會 made me think of Kyoto, where the streets are in orderly east-west and north-south fashion. I've never been to Xi'an, China. My understanding, and confirmed by Wiki (link 1), is that Kyoto was modeled after Xi'an, or rather, the Chang'an of China's Tang dynasty.
According to this source, 行會 was created out of necessity to better manage its constituents, as well as for taxation purposes. The residents lived in what is called wards (坊, also known as 里 link 3) or 裏 (link 4) in Han periods, also referred to as 里/裏坊), and the businesses were mainly located in the markets 市. Wards and markets were further divided into rows. For markets, similar businesses would be located within the same row.
8.封建社会中商肆、行会的首领。 《周礼·地官·肆长》“肆长各掌其肆之政令” 唐 贾公彦 疏：“此肆长谓一肆立一长，使之检校一肆之事，若今行头者也。” 范文澜 蔡美彪 等《中国通史》第四编第一章第二节：“商行的首领叫‘行头’或‘行老’，行头有权规定本行商货的物价。 - from _http://baike.baidu.com/view/603481.htm
So based on all this and to answer the original question, yes, 行 in reference to businesses and industries does indeed stem from its original meaning of 'line'.
This is a polysemous word.
rows or lines.
order of brothers.
same as 1 (rows: horizontal & columns: vertical)
I don't know how to describe this…… eh……
place for buy and sell