At the time our ancestor was believed to have arrived in America most Irish spoke Gaelic and not English.  There were small pockets of educated Irish that spoke many languages but the common class Irish were Catholic and they spoke only Gaelic and may or may not have been able to read and write Gaelic. The English were using deadly force to make the Irish English so there was considerable cause among the Irish to keep Irish traditions probably in secret.   Irish surnames (patronymic) in the time our ancestor lived were different from the American surname we are familiar and we have to look at grammar rules to help understand this.  A person's name is a proper noun. Nouns name people, places, and things. Every noun can be classified as common or proper. A proper noun has two distinctive features: 1) it will name a specific [usually a one-of-a-kind] item, and 2) it will begin with a capital letter no matter where it occurs in a sentence.  The Gaelic language had no "K" or "y" so it was not possible to spell our surname as Ó Kelley in Gaelic.   In Gaelic Ceallach is the proper noun equal to the English surname of "Kelly" or "Kelley" depending on English grammar rules or regional customs at the time it was translated.  There were three basic periods, Old English, Middle English, and modern English and these periods influenced the Gaelic to English translations of names and words.  See Short History of the English Language for greater detail.  If the name was translated during the late Middle English time, or before 1600 the "ey" was often used at the end of names that had that sound to make the name more easily pronounced  by a reader who was unfamiliar with the name but the modern English period began in the seventeen century and some names were shortened by removing the "e" in front of the "Y" for one of the simplest reasons, profit.  In 1476 the printing press arrived in London and books in mass were published for the first time.  Pages cost money and every letter had to be hand set so by reducing the number of letters in words and names one could fit more words on the page resulting in more profit for both publisher and author.  Because these books were mass produced they became the standard for how people spelled.  Names like o Kelley became o Kelly or just Kelly. It wasn't just our family name that was reduced, many family name were reduced; my wife's family name is Plum and in its original form it was Plumbe but about the same time that my family name was being reduced, so was hers and for the same reasons. And it wasn't just names that were reduced, the word "old" and Queen were originally spelled "olde" and "Queene" but like our name they and many other spellings were reduced to remove the unnecessary extra letters.  It really was that simple, before the printing press our name like so many others had extra letters when translated into English as o Kelley and sometimes O'Kelley and I have even see it as Keylleye but after the printing press it was shortened to Kelly to save space on a page.  I am certain the native Irish have it backwards, Kelley is one of the oldest form of the name in English and Kelly is a newer form and because all knowledge of Kelley has been lost in Ireland, they think it never existed in Ireland, that it is an American creation but it is an American preservation.  My generation should understand this easily because we have seen this same occurrence in the use of email, text messaging, and twitter.  To save time, we have shortened the spelling of many words and I am just as certain that over time these new spellings will stick and the original spellings will become lost as the original English translation of our name has become lost in Ireland.  I suspect many far more experienced Irish researchers have stumbled across the same clues that I have and have failed to consider the implications.

The history of our family name becomes even more confusing when one consider that the English used surnames and the Irish used descriptions that describes a child or grandchild's relationship with the male family elder.  The first male generations born to Ceallach would be know as the sons of Ceallach and the females would be known as the daughters of Ceallach as if you were describing Ceallach's boat or car and this is written as Mic Ceallaigh (sons of Ceallach) and Ua Ceallaigh (grandsons of Ceallach).  The Ó means descendant so it could represent a son, daughter, grandson, or grand daughter.  Under the Irish system as it was in our ancestor's time I would be Rick grandson of Kelley and not Rick O'Kelley so I wouldn't have a surname as we understand them.  Only the first living Kelley holds that honor everyone that comes after is a descendent of him.  To make this more complicated, females who married into a family rarely took their husbands head of the family name because they could not become the daughter or grand daughters of Ceallach when they married a son or grandson.  Female descendents were Nic Ceallaigh (daughters of Ceallach) and Ni Ceallaigh (grand daughters of Ceallach) so in reality, only the original Ceallach had anything like a surname, all the rest that follow is a name that describes their relationship to their ancestor using one of several Genitive cases of the name Ceallach such as Ceallaig or Ceallaigh.  See Gaelic to English for more Irish naming customs.

Gaelic Ceallaigh is pronounced as "Kel" "ley"; the "C" has a "K" sound like English "Cat" or "Cattle" and the "laigh" has an "Ley" sound.  The sons were expressed as Mic Ceallaigh or as Mac Ceallaigh and the grandsons were express as Ua Ceallaigh and descendents as Ó Ceallaigh and over time was used as an Irish surname.  The accent mark or later the apostrophe is to make the reader aware that the O has a long O sound but this was also demonstrated using a space and I have even seen a comma used.  Since the English language didn't have the accent mark that appear above the "O" when these Gaelic descriptive names were translated into English as to appear like an English surname that is when they appeared as o Kelley and sometimes O'Kelley depending on English rules at the time the translator was educated or before or after the printing press.  We see that today, the older generation writes their papers totally different from the style used by the younger generation so I am surprised that most genealogists don't embrace that this is how and why names were altered; much of it had to do with when the translator was educated and what the rules were at the time of his education.  Notice in the early translation of our name to English there is a space between the "O' and the actual surname and the o is lower case.  That is because the "O" is used to modify the name, it isn't part of the proper noun.  It simply takes the place of the word  "descendant of".  The apostrophe may or may not have been not used in the English spelling of Irish names like O Kell(e)y at that time but it began to appear in America around the 1800s when there was a move to standardized the use of the apostrophe, it was added to tell the reader that the accent mark above the "O" is missing.   Alethea Jane Macon in her book Four O’Kelley Sons and Some of their Descendants tells us that the Gaelic spelling of O'Kelley was O'Ceallaigh but I can find no evidence that the apostrophe was every used in the Gaelic language in that manner so O'Ceallaigh seems not proper;  Gaelic spelling would be Ua Ceallaigh or Ó Ceallaigh.