'bayhead' is a compound of the noun 'bay' and the noun 'head'. 'bay' originates from Old French, specifically the word 'baee' (Middle English 'bay'), where it meant 'broad inlet of the sea'; 'head' originates from Old English, specifically the word 'hēafod', where it meant 'top' or 'promontory'.

'bayhead' developed as a straightforward compound in Middle to Early Modern English from the two separate words 'bay' and 'head' and eventually became the modern English compound 'bayhead'.

Initially it meant 'the head (land) of a bay' and this literal sense has largely remained unchanged into modern usage.