English short form of Peggy [q.v.], a pet name for Margaret [q.v.], from Greek or Persian "pearl". 
A correspondent [B2] relates that a Scottish ancestor named Margaret was called Peg.  It was explained that the usual pet name would be Maggie which was also a common nickname for the bird, 'magpie'.  In Scots the magpie may be called a "peg-pie", hence Peg for a girl also called "Maggie".  Authorised sources have some difficulty explaining the transition from M- to P- and this may be a reasonablle explanation. 
[Note: The Oxford Names Companion mentions that there may have been "celtic influence" for this change of initial letter, but dismisses the likelihood!]  |