"small," 1898, baby-talk, from bit (n.1) + -y (2). Earlier "made up of little bits," 1873.
Entries linking to bitty
bit n.1
"small piece," c. 1200; related Old English bite "act of biting," and bita "piece bitten off," which probably are the source of the modern words meaning "boring-piece of a drill" (the "biting" part, 1590s), "mouthpiece of a horse's bridle" (mid-14c.), and "a piece (of food) bitten off, morsel" (c. 1000). All from Proto-Germanic *biton (source also of Old Saxon biti, Old Norse bit, Old Frisian bite, Middle Dutch bete, Old High German bizzo "biting," German Bissen "a bite, morsel"), from PIE root *bheid- "to split."
The meaning "small piece, fragment" of anything is from c. 1600. The sense of "short space of time" is 1650s. Theatrical bit part is from 1909. The colloquial sense of "small coin" in two bits, etc. is originally from the U.S. South and the West Indies, in reference to silver wedges cut or stamped from Spanish dollars (later Mexican reals); transferred to "eighth of a dollar."
-y 2
adjective suffix, "full of or characterized by," from Old English -ig, from Proto-Germanic *-iga- (source also of Dutch, Danish, German -ig, Gothic -egs), from PIE -(i)ko-, adjectival suffix, cognate with elements in Greek -ikos, Latin -icus (see -ic). Originally added to nouns in Old English; used from 13c. with verbs, and by 15c. even with other adjectives (for example crispy). Adjectives such as hugy, vasty are artificial words that exist for the sake of poetical metrics.
bitsy adj.
"small," 1883, baby-talk from plural of bit (n.1) or a variant of bitty (q.v.).