Of uncertain origin. From the 18th century it is clearly used as a pet form of Ann (see Nan), but it may originally have been a similar formation deriving from the common medieval given name Annis, a vernacular form of Agnes. Nowadays it is an independent name, and was especially popular in America in the 1930s, 40s, and 50s. A meaning of the name Nancy is Grace.
English, Scottish, and North German (also Töller): occupational name for a toll taker or tax collector, from an agent derivative of Middle English toll ‘tax’, ‘payment’, Middle Low German toll (from Late Latin toloneum, teloneum, a derivative of Greek telos ‘tax’).