The Collaborative International Dictionary of English v.0.48:

Navvy \Nav"vy\, n.; pl. Navies. [Abbreviated fr. navigator.]
   Originally, a laborer on canals for internal navigation;
   hence, a laborer on other public works, as in building
   railroads, embankments, etc. [Eng.]
   [1913 Webster]

WordNet (r) 3.0 (2006):

navvy
    n 1: a laborer who is obliged to do menial work [syn: drudge,
         peon, navvy, galley slave]