The name Wally is a diminutive form of the German name Walter, which means "army ruler" or "commanding the army". It is derived from the Germanic elements "waltan" meaning "to rule" and "heri" meaning "army". The name Walter and its variants like Wally have been popular in many European countries for centuries.

Wally first emerged as a nickname for Walter in England during the Middle Ages. It was a common practice to shorten names during this time, leading to the rise of nicknames and diminutives. The earliest recorded use of the name Wally dates back to the 13th century.

In literature, one of the earliest references to the name Wally can be found in Geoffrey Chaucer's "The Canterbury Tales", written in the late 14th century. In the prologue, Chaucer mentions a character named Wally, though it is unclear whether this was intended as a nickname or a full name.

One of the most famous historical figures with the name Wally was Wally Sanger (1898-1967), an American businessman and co-founder of the iconic hot dog brand, Nathan's Famous. Sanger played a pivotal role in popularizing the hot dog as a quintessential American food.

Another notable Wally was Wally Schirra (1923-2007), an American astronaut who flew in the Mercury, Gemini, and Apollo space programs. He was the only person to fly in all three of these landmark NASA programs and was known for his wit and sense of humor.

In the world of sports, Wally Pipp (1893-1965) was an American baseball player who played for the New York Yankees in the early 20th century. He is best remembered for taking a day off due to a headache, allowing a young Lou Gehrig to step in and begin his legendary streak of 2,130 consecutive games played.

Another sports figure with the name Wally was Wally Amos (born 1936), an American businessman and former talent agent who founded the famous cookie brand "Famous Amos". His cookies became a cultural phenomenon in the 1970s and 1980s.

Lastly, Wally Badarou (born 1955) is a French musician and record producer who has worked with artists such as Grace Jones, Mick Jagger, and Robert Palmer. He is known for his contributions to the development of new wave and electronica music in the 1980s.