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This is an ancient Welsh name that derives from the Welsh word 'fychan', meaning 'small' or, in certain contexts, 'younger', and as such it was a common nickname that was originally used to differentiate people with the same name either within a family or community.

'Fychan' was sometimes used to differentiate between a father and son who had the same name – in that sense, Dafydd Fychan, for example, would therefore mean 'Dafydd the younger'. In other cases, 'fychan' was a nickname that referred to a person's height and so meant 'short'.

Traditionally in Wales there were no fixed hereditary surnames as individuals were identified via their given names plus their fathers' personal names, with any nickname, such as 'fychan', also attached. For example, William ap Dafydd Fychan, meaning 'William the son of Dafydd the younger', or 'William the son of Dafydd the short one'.

In Wales, hereditary surnames only generally came into being between the 16th and 19th centuries, and sometimes an ancestor's nickname would be adopted as the surname. This was the case with the word 'fychan' which was anglicised to 'Vaughan' or 'Vaughn'.

There is no hard and fast rule as to when a family adopted a fixed surname in Wales, but the further north and west a family lived, the later they started to use a hereditary surname, sometimes, especially in the north west of the country, not until the first half of the 19th century. A family's social status also influenced when they adopted fixed surnames – the higher the status, the earlier they used hereditary surnames, most often during the 16th century just after the Act of Union between Wales and England, but sometimes prior to this.

Early examples of the use of Vaughan as a surname include Jenkin Vychan, Esquire of the body to King Henry VII, whose son John adopted the surname in the early 16th century.

Some famous high status Welsh Vaughan families include the Vaughans of Trawsgoed (Crosswood), Cardiganshire, who could trace their ancestry back to Adda ap Llewelyn Fychan (c. 1200); and the Vaughan family of Llwydiarth, Montgomeryshire who were descended from the Princes of Powys.

Robert Vaughan (c.1592–1667) of Dolgellau, Merionethshire, was a famous Welsh antiquarian and genealogist who founded the famous Hengwrt Library. He was the son of Hywel Fychan ap Gruffydd ap Hywel (also known as Hywel Vaughan) who was the descendant of the Lords of Nannau and the Princes of Powys.

Although references to the surname are found in significant numbers throughout Wales, it was particularly popular in the north, as well as in English counties that border Wales, such as in parts of Herefordshire and Shropshire, where the influence of the Welsh language remained until relatively recent times.

In 1841, references to the surname appear all over Wales on that year's census, from Anglesey in the north west down to Monmouthshire in the south east, and it still remained a relatively common surname in the English counties of Shropshire, Cheshire and Herefordshire.

SOURCES:

1841 Wales census

A Dictionary of Welsh Biography, National Library of Wales, https://biography.wales/

A Dictionary of English and Welsh Surnames (1896) by Charles Wareing Endell Bardsley

Patronymica Britannica (1860) by Mark Antony Lower