"body of people not in religious orders," early 15c., from Anglo-French laite, from lay (adj.) + -ity.
Entries linking to laity
lay adj.
"uneducated, non-professional; non-clerical," early 14c., from Old French lai "secular, not of the clergy" (12c., Modern French laïque), from Late Latin laicus, from Greek laikos "of the people," from laos "(the common) folk, the people, the crowd; the military; a tribe," in the New Testament especially "the Jewish people," also "the laity," a word of unknown origin. Beekes writes that it is "most often connected with" Hittite lahh- "campaign" and Old Irish laech "warrior," but that the form "is rather Pre-Greek, and has a Pre-Greek suffix -it(o)-. In Middle English, contrasted with learned, a sense revived 1810 in contrast to expert. Laic is a more modern borrowing directly from Late Latin.
-ity
word-forming element making abstract nouns from adjectives and meaning "condition or quality of being ______," from Middle English -ite, from Old French -ete (Modern French -ité) and directly from Latin -itatem (nominative -itas), suffix denoting state or condition, composed of -i- (from the stem or else a connective) + the common abstract suffix -tas (see -ty (2)).
Roughly, the word in -ity usually means the quality of being what the adjective describes, or concretely an instance of the quality, or collectively all the instances; & the word in -ism means the disposition, or collectively all those who feel it. [Fowler]