Usually treated as a modern form of Kaylee, combining Irish-influenced sounds with the sense 'slender' or 'graceful.'
Kaily is a modern English phonetic variant of Kayleigh or Kaylee, names that belong to a cluster of popular Western feminine names built around the Kay- sound that surged in popularity across English-speaking countries in the late 20th century. The deeper etymology traces back to the Irish and Scottish Gaelic name Cadhla, meaning "graceful" or "beautiful" — a word used in early Irish poetry to describe physical and spiritual elegance. That Gaelic root reached English speakers through the Irish diaspora, where Cadhla was rendered phonetically into spellings that English mouths could manage, eventually settling into the Kayleigh/Kailey family.
An alternative etymology links Kaylee and its variants to a compound of the names Kay (itself from the Greek Aikaterine — Katherine — or the Welsh cai, meaning "rejoice") and Lee (the Old English word for "meadow" or "clearing"), creating a compound place-name type common in English given-name formation. Both derivations point toward the same sunny, grounded quality — grace, beauty, natural openness — and the name's mid-century Anglo-American popularity was reinforced by Marillion's 1985 ballad "Kayleigh," which introduced the spelling to a generation of British listeners. Kaily's specific spelling — with the K, the -ai- diphthong, and the -ly ending — reflects a late 20th and early 21st century American preference for phonetically precise, visually distinct variants of popular names.
Parents using this spelling are often signaling a desire to individualize a familiar sound, to give their daughter the warmth of a well-known name with a personal signature. In that sense, Kaily is as much a document of contemporary naming culture as it is of etymology — a name that wears its moment in time lightly and gracefully.