1530s, originally "sweetheart," applied to either sex, from Dutch boel "lover; brother," probably a diminutive of Middle Dutch broeder "brother" (cf. Middle High German buole "brother," source of German Buhle "lover;" see brother (n.)).
Meaning deteriorated 17c. through "fine fellow" and "blusterer" to "harasser of the weak" (1680s, from bully-ruffian, 1650s). Perhaps this was by influence of bull (n.1), but a connecting sense between "lover" and "ruffian" may be in "protector of a prostitute," which was one sense of bully (though not specifically attested until 1706). The expression meaning "worthy, jolly, admirable" (especially in 1864 U.S. slang bully for you!) is first attested 1680s, and preserves an earlier, positive sense of the word.
Excellent; good (1840s+)interjection
: Bully for you! (1780s+)noun
A track worker; gandy dancer (1900+ Railroad)
[first two senses fr bully, ''a beloved person, darling,'' of obscure origin, attested fr 1538. Bully, ''worthy, admirable,'' used of persons, is attested in 1681]