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From craze + -y.

Earliest meaning (1570s) was that of "diseased, sickly". Meaning "full of cracks or flaws" is from the 1580s; that of "of unsound mind, or behaving as so" is from the 1610s. Jazz slang sense "cool, exciting" attested by 1927. To drive (someone) crazy is attested by 1873. Phrase crazy like a fox recorded from 1935. Crazy Horse, Teton Lakota (Siouan) war leader (d. 1877) translates thašuka witko, literally "his horse is crazy".