O'erlay means: An obsolete Scottish term for a large decorative cravat worn around the neck, popular in the 17th and 18th centuries. The word is a Scots dialectal contraction of overlay. Now entirely historical and. The word is mostly archaic or historical; you will only encounter it in old texts, period drama, or school history rather than current teen conversation. There is no real cause for parental concern; it is descriptive vocabulary rather than risky behaviour.