Gracey is an interesting example of a name with both locational and personal origins. It is derived from the Olde English "Groes" meaning pasture or grazing and came to describe someone who lived on a patch of meadowland (identical in meaning to the Olde High German, "gras"). As a personal name it began with the Olde French "gris", meaning grey found in Medieval times as "grece" or "greyce". Scribes later latinized the name to Gratia which gave rise to the popular Olde French name "Grace". The pet form of Grace was created with the addition, as seen here of the diminutive suffix "ey".In 1680, Stephen Gracey married Jane Allcock at St. James, Dukes Place, London on 23rd September. The first recorded spelling of the family name is shown to be that of Gilbert Gracye, which was dated 1296, in the "Subsidy Rolls of Sussex", during the reign of King Edward 1, known as "The Hammer of the Scots", 1272 - 1307. Surnames became necessary when governments introduced personal taxation. In England this was known as Poll Tax. Throughout the centuries, surnames in every country have continued to "develop" often leading to astonishing variants of the original spelling.
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