Pleasant, satisfactory, or adorable; also a small duck or a term of endearment.
From 'duck' with the diminutive suffix '-y' or '-ie.' The adjective meaning 'excellent' emerged in British slang around the 1800s, possibly because ducks were seen as pleasant creatures or from rhyming slang. The noun form is simply a small or cute version of duck.
Just like people say 'ducky' is fine and dandy, ducklings are literally called 'duckies'—but the word started as British slang for 'excellent,' probably because ducks appear so carefree floating on water.
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