Likely related to Merle or Mary-based forms, with French associations and a soft, modern feel.
Merly is a variant of Merle, a name that arrives in English from Old French merle, meaning 'blackbird' — the same word that gives French its common name for that resonant, musical songbird. Merle entered the English-speaking world as both a given name and a surname in the nineteenth century, carried across the Atlantic by French-speaking settlers and later adopted more broadly in the American South and Midwest. The bird itself has always carried associations of beautiful, improvisational song, and names derived from it tend to evoke music and natural grace.
The most iconic bearer of the Merle root in American culture is Merle Haggard, the Bakersfield country singer whose voice and storytelling defined working-class American music for half a century. Country music also gave the world Merle Travis, the guitarist whose fingerpicking style bears his name. In a different register, the actress Merle Oberon — born Estelle Merle O'Brien Thompson — brought the name to Hollywood's golden age, lending it a glamorous, exotic shimmer.
Merly, with its -y ending, softens Merle into something more intimate and playful, following the same pattern as names like Early becoming Erly or Pearl becoming Pearly in folk naming traditions. It is particularly at home in Southern American and Appalachian contexts, where such diminutive transformations have long been a way of making a name feel warmly personal. Merly is rare today, which gives it an heirloom quality — the kind of name found in a great-grandmother's Bible that suddenly feels fresh again.