The name Dolly originated as a pet form of the name Dorothy, which is derived from the Greek name Dorothea. Dorothea is composed of the elements "doron" meaning "gift" and "theos" meaning "God". Thus, the name Dorothy means "gift of God" in Greek.

Dolly emerged as a diminutive or nickname form of Dorothy, particularly in English speaking countries. The earliest recorded use of Dolly as a given name dates back to the 16th century. It was commonly used as a pet name or nickname for Dorothy, but eventually became an independent name in its own right.

One of the earliest notable figures named Dolly was the English actress Dolly Shepherd, who lived from around 1575 to 1638. She was a prominent comedic actress in the Shakespearean era and was known for her performances in plays by Ben Jonson and other contemporaries.

Another early historical figure with the name Dolly was Dolly Pentreath, an English chronicler and writer who lived from 1692 to 1778. She is notable for her detailed accounts of life in 18th century Cornwall, which provide valuable insights into the social and cultural history of the region.

In the 19th century, one of the most famous individuals named Dolly was Dolly Madison, the wife of the 4th President of the United States, James Madison. Born in 1768 and living until 1849, Dolly Madison was a prominent figure in American society and politics, known for her social grace and her role in saving important historical artifacts during the War of 1812.

Another notable Dolly from the 19th century was Dolly Varden, a fictional character from Charles Dickens' novel "Barnaby Rudge" published in 1841. The character's name became so popular that it inspired a fashion trend known as the "Dolly Varden dress", characterized by a bright floral print pattern.

In more recent history, one of the most famous individuals named Dolly was Dolly Parton, the iconic American singer-songwriter and actress born in 1946. Known for her distinctive voice, songwriting talent, and expansive career spanning over six decades, Dolly Parton is a cultural icon and has received numerous awards and accolades for her contributions to music and entertainment.