Blessed, touched or favoured by God; fortunate, also innocent, or harmless or helpless; hence our word 'silly'. The word was applied to the mentally disturbed;
Cf. our use of 'touched' when describing someone's odd behaviour. The word was also applied to lepers. [< OldEngl. saelig = happy, fortunate] -
Cf. Holiday
Dictionary of Medieval Terms and Phrases. Christopher Coredon with Ann Williams.