This ancient and honourable Welsh surname has its origins in a nickname or byname given originally to distinguish between a father and son who had the same name, as in the recording of one Guyn Vaghan ap Guyn in 1325; Gwyn the younger son of Gwyn. The name derives from the Welsh "fychan", a mutation of "bychan", itself a diminutive of "bach", meaning small, little. This is also found as the modern Welsh surname "Baugh", from "bach", used as a nickname for a small or short man. The similarity of the "f" and "v" sounds often resulted in variant forms of the same name when written by non-Welsh speaking scribes. The surname development since 1222 (see below) includes: Rys Vychan in 1248, William Vachan in 1275, and Jeuan Vaghann in 1391, all found recorded in the registers of West Wales. Somewhat later Evan Vaughan of Shropshire is listed in the Register of the University of Oxford for 1601, whilst Jenkyn Vaughan was the prebendary of St Davids, Harlech, in 1621. Amongst the many notable bearers of the surname was Richard Vaughan, Solicitor to Queen Elizabeth 1st in 1580, whilst the poet Henry Vaughan (1622 - 1695), whose collected poems, entitled "The Retreat", inspired Wordsworth's "Ode on the Intimations of Immortality". The coat of arms granted to Vaughan in 1491 by Henry Tudor, (King Henry V11 of England 1485-1510), has the blazon of per pale, blue and purple, a gold fish haurient, the fish being the heraldic sign of wisdom. The first recorded spelling of the family name is shown to be that of Grifit Vehan, which was dated 1222, in the "County Records of Breconshire", during the reign of King Henry 111, known as "The Frenchman", 1216 - 1272.

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