'barmy' originates from Old English and northern English dialect 'barm', specifically the word 'barm' meaning 'yeast' or 'froth', where the sense of frothiness led to figurative uses.

'barm' (the foam on fermenting beer) gave rise to the adjective 'barmy' meaning 'full of barm' or 'frothy'; over time 'barmy' developed the colloquial sense 'foolish' or 'mad', and the variant spelling 'barmie' emerged as an informal/nickname form.

Initially, it referred to being 'covered with barm' or 'frothy'; later it shifted to describe someone 'foolish' or 'mad', which is the modern colloquial meaning.