Chambers dictionary gives the pronunciation as 'keltic' or 'seltic' but it's not clear why the football club opted for the 's' version. Etymology is given as Latin: Celtae and Greek: Keltoi/Keltai. All of these sounds would have been 'k' originally though the late Latin sound became more 'frontal' resulting in the Spanish 'th' and Italian 'ch'.
Up to about 100 years ago, it was normal to pronounce a C before an E as a soft c, as in 'once'. The normal pronunciation of the word was 'seltic'. The team was named at that time. Some time in the 20th Century, research discovered that the Romans would have used a hard c everywhere, so that the way we pronounce Latin was revised. Julius Caesar is now pronounced 'yoolius' 'kigh-sar', for example. It was Caesar who called them the Celts: he said that is what they called themselves, but this name is not recorded anywhere else. We now know that what he was saying was 'kelts' so that pronunciation is normally used.
“Seltic” is the traditional pronunciation: it is given first in the OED, whose “C” section was compiled about the end of the nineteenth century. It has been gradually replaced by “Keltic” because scholars are increasingly fond of using classical Latin pronunciations rather than natural English ones. Fowler, writing in the 1920s, noted that “Seltic” was giving way to “Keltic.”
Maybe football fans have preserved the old pronunciation because they don’t move in scholarly circles – or maybe proper names like the names of football clubs are less apt to change (after all, the pedants who have given us “Keltic” haven’t yet started speaking of “Yoolius Kye-sar”).
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