Origin and history of shady

Middle English shade, schade, Kentish ssed, "dark image cast by someone or something; comparative obscurity or gloom caused by the blockage of light," from late Old English scead "partial darkness; shelter, protection," also partly from sceadu "shade, shadow, darkness; shady place, arbor, protection from glare or heat." Both are from Proto-Germanic *skadwaz (source also of Old Saxon skado, Middle Dutch scade, Dutch schaduw, Old High German scato, German Schatten, Gothic skadus), from PIE *skot-wo-, from root *skoto- "dark, shade." 

shade, shadow, nn. It seems that the difference in form is fairly to be called an accidental one, the first representing the nominative & the second the oblique cases of the same word. The meanings are as closely parallel or intertwined as might be expected from this original identity, the wonder being that, with a differentiation so vague, each form should have maintained its existence by the side of the other. [Fowler]

The figurative use in reference to comparative obscurity is from 1640s. Hence throw into the shade, etc., "obscure by contrast or superior brilliancy." The meaning "a ghost" is from 1610s; dramatic (or mock-dramatic) expression shades of _____ to invoke or acknowledge a memory is from 1818, from the "ghost" sense.

The meaning "lamp cover" is from 1780. The sense of "window blind. contrivance for shutting out light at a window" is recorded by 1845. The meaning "cover to protect the eyes" is from 1801.

The meaning "grade of color" is recorded from 1680s; that of "degree or gradation of darkness in a color" is from 1680s (compare nuance, from French nue "cloud"). The meaning "small amount or degree" of anything is from 1749.

very common adjective suffix, "full of, covered with, or characterized by" the thing expressed by the noun, Middle English -i, from Old English -ig, from Proto-Germanic *-iga-, from PIE -(i)ko-, adjectival suffix, cognate with elements in Greek -ikos, Latin -icus (see -ic). Germanic cognates include Dutch, Danish, German -ig, Gothic -egs.

It was used from 13c. with verbs (drowsy, clingy), and by 15c. with other adjectives (crispy). Chiefly with monosyllables; with more than two the effect tends to become comedic.

*

Variant forms in -y for short, common adjectives (vasty, hugy) helped poets after the loss of grammatically empty but metrically useful -e in late Middle English. Verse-writers adapted to -y forms, often artfully, as in Sackville's "The wide waste places, and the hugy plain" (and the huge plain would have been a metrical balk).

After Coleridge's criticism of it as archaic artifice, poets gave up stilly (Moore probably was last to make it work, with "Oft in the Stilly Night"), paly (which Keats and Coleridge himself had used) and the rest.

Jespersen ("Modern English Grammar," 1954) also lists bleaky (Dryden), bluey, greeny, and other color words, lanky, plumpy, stouty, and the slang rummy. Vasty survives, he writes, only in imitation of Shakespeare; cooly and moisty (Chaucer, hence Spenser) he regards as fully obsolete. But in a few cases he notes (haughty, dusky) they seem to have supplanted shorter forms.

Proto-Indo-European root meaning "dark, shade." 

It might form all or part of: nightshade; scotoma; shade; shadow; shady.

It might also be the source of: Greek skotos "darkness, gloom;" Albanian kot "darkness;" Old Irish scath, Old Welsh scod, Breton squeut "darkness," Gaelic sgath "shade, shadow, shelter;" Old English scead "partial darkness," sceadu "shade, shadow, darkness," Dutch schaduw, German Schatten, Gothic skadus "shadow."