There is an Anglo Saxon word 'wealh' which means 'foreign' and which the Anglo Saxons specifically applied to the folk of the Celtic fringe. The land to the west of England became known as the land of the wealas, or foreigners, what we now know as Wales. The Welsh know their own land as Cymru.
Cornwall was originally known as West Wales, but because the land was shaped like a horn - also called a 'corn' in old language, it became Cornwall. Individuals from Wales sometimes took the surnames Welsh and Walsh. If they were north of the border that surname then became Wallace.
Some Welsh remained in England and gave their name to settlements such as Walcot (Welsh cottage) Walton (Welsh town) Walford (Welsh ford) and Saffron Walden (A dene or valley of the Welsh where saffron was grown).
On the continent, the Saxons encountered other foreigners to name in their language. So there are the 'Walloons' of southern Belgium and the Walachians of Romania. And then of course there foreign food. The 'waelh hnutu' which became the walnut.
And on nicknames:
A nickname was once 'an eke name' which literally means 'an also name.' Over time the 'eke' has become 'ick' and the initial 'n' has been transferred to the previous word.' The migrating 'n' is found all over the place. 'an ewte' has become 'a newt'. 'An otch' has become 'a notch.' Other words have transferred the 'n' to the 'a'. So instead of 'a napron' we now have 'an apron.' Instead of 'a norange' we now have 'an orange.' 'A numpire' became 'an umpire'. The old Saxon word 'nadra' for a viper has become 'adder' in modern English. An earlier form was 'natter' hence the saying 'As mad as a natter' i.e. an angry snake. Over time and down to Lewis Carroll and the effects of mercury on hat makers, the phrase changed to 'Mad as a hatter.'
Today's photo from my archive.
Late Anglo Saxon knife with the owner's name Osmund on the blade.