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I can easily see how it could be short for Charlotte, as some derivatives are rhyming versions of other ones; Polly from Molly, for example. Cotty could easily be a rhyming derivative of Lottie/Lotty. I suspect that's how Totty, a vintage derivative of Charlotte, also came about.

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Cotty is slightly better than Totty, but I wouldn't choose to go by it!

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~Charley~
https://www.behindthename.com/pnl/184785