kelpie, water kelpie noun, in Celtic folklore a mythical monster living in water which can transform itself into a horse or other creature to lure unwary victims to their deaths: If he throws not the silver coin then the Kelpie shall take him away! la18-. etymology: English water + SND suggests ‘possibly Gaelic cailpeach, colpach ‘a bullock, colt’’ but this seems unlikely; attested by JS and DW in DC