Crazy or silly in a humorous way, or tasting like nuts; can also mean obsessed with something.
From English 'nut' plus suffix '-y' to mean 'resembling or containing nuts.' The slang meaning 'crazy' developed in the late 1800s, possibly because 'nuts' were associated with things that were hard, brittle, and unpredictable.
The idea that 'crazy' and 'nuts' are synonyms is so old that we've forgotten it ever made sense—but it probably started because people saw nuts as hard, indigestible objects that could make you sick if you weren't careful, so going 'nutty' meant something went wrong in your thinking.
Complete word intelligence in one call. Free tier — 50 lookups/day.