On-line Man-Computer Communication (1962) [pdf]

FWIW, the term used by here Licklider and Clark does not mean "connected to a network".

"On-line" in the 1960s meant "interactive", that is, sitting at a terminal (in this case as graphical terminal) directly interacting with the computer.

The opposite, "off-line", meant batch computing, where you typed things up on cards, dropped them off with an operator, and waited a few hours until they were loaded and run.

This is the reason for terms like Online Transaction Processing (OLTP) and online algorithm.

("On-line" was also used for computers connected directly to sensors as part of a computer control system.)