Its source is Ceallach, an Irish Gaelic name meaning "Strife, war."
Alternate interpretations of Ceallach range from ''bellicose'' to ''church-goer.'' The Scottish placename Kelly, possibly derived from a Pictish expression referring to the holly tree, is another possible influence.
The Irish O'Kelly clan figures prominently in the colorful and tragic history of Ireland. Their surname inspired the use of the personal name Kelly, mainly for boys, starting at the the beginning of the 20th century.
The use of this name among girls was probably influenced by American movie star Grace Kelly. She won a 1954 Best Actress Oscar for her performance in Country Girl, but forsook Hollywood in 1956 to marry Prince Rainier of Monaco. The Prince and Princess reigned together over their tiny Mediterranean principality until her death in 1982.