There is a possibiliy that it is derived from 'fwendy-wendy', and also a possibility that it derives from the village of Wendy (Herts?) which apparently Barrie passed near on his way to and from Scotland. Either way, it's down to Barrie.(Source: memory.)
While research shows that Barrie didn't invent the name "Wendy", he might as well have. Barrie introduced the character Wendy Darling in Peter Pan in 1904.
"The name Wendy appeared twice in the 1881 census of England, one born 1840, and one born in 1880. The magazine Family History also states that Wendy, along with the names Marian and Shirley were once boys names, and that in 1797 a boy named Wendy was apprenticed to some one in Glos."
The name is found in United States records from the 19th century; Wendy Gram, a female resident of Ohio, was born in 1828, and the name Wendy appeared over twenty times in the U.S. Census of 1880. In Britain, Wendy appeared as a boy's name in the 1881 census of England, and was occasionally used as a nickname for the Welsh Gwendolyn. However, its popularity as a girl's name is attributed to the character Wendy Darling from the 1904 play Peter Pan and its 1911 novelization Peter and Wendy by J. M. Barrie. The name was inspired by young Margaret Henley, daughter of Barrie's friend W. E. Henley. With the common childhood difficulty pronouncing Rs, Margaret reportedly used to call him 'my fwiendy-wendy'.
The name Wendy is sometimes considered a variation of the name Wanda.
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