This name was given, we are told, in former days, by the good housewives of the adjacent country, from the inveterate propensity of their husbands to linger about the village tavern on market days
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To "tarry" means to linger, the above quote alludes to the fact that the women often commented on the way their husbands tarried in the tavern before making their way home. They "tarried" in town became Tarry Town..... and it stuck.
The Legend of Sleepy Hollow