From Old English meaning 'clearing on a ledge'; also a literary surname via poet Percy Bysshe Shelley.
Shelley originates as an English topographic surname, derived from the Old English elements scylf (ledge or shelf) and leah (woodland clearing), describing someone who lived near a shelving hillside grove. Like many place-derived English surnames, it made the transition to given name use in the nineteenth century, carried on the coattails of Romantic literary fame. Percy Bysshe Shelley, the radical poet who wrote "Ozymandias" and "Ode to the West Wind," gave the name a luminous, rebellious association — a figure of blazing genius who died at twenty-nine, leaving behind some of the most technically dazzling verse in English.
Equally significant is Mary Wollstonecraft Shelley, Percy's wife, who at eighteen wrote Frankenstein; or, The Modern Prometheus — arguably the first science fiction novel and certainly one of the most philosophically consequential books of the nineteenth century. Mary Shelley's genius reframes the name with a female intellectual authority to match her husband's poetic one. Between them, the Shelleys made the name synonymous with imaginative daring and philosophical courage.
As a given name, Shelley was almost exclusively feminine through the mid-twentieth century, peaking in American usage in the 1950s and 60s. Actress Shelley Winters, who won two Academy Awards for fierce character performances, exemplified the era's use of the name. Today Shelley sits in an interesting position — retaining its soft, Romantic-era charm while carrying enough literary weight to satisfy historically minded parents. The variant Shelly removes the -ey elegance; the -ley ending keeps it tied to its woodland origins.