The Collaborative International Dictionary of English v.0.48:

Dally \Dal"ly\, v. t.
   To delay unnecessarily; to while away.
   [1913 Webster]

         Dallying off the time with often skirmishes. --Knolles.
   [1913 Webster]

The Collaborative International Dictionary of English v.0.48:

Dally \Dal"ly\ (d[a^]l"l[y^]), v. i. [imp. & p. p. Dallied
   (d[a^]l"l[i^]d); p. pr. & vb. n. Dallying.] [OE. dalien,
   dailien; cf. Icel. pylja to talk, G. dallen, dalen, dahlen,
   to trifle, talk nonsense, OSw. tule a droll or funny man; or
   AS. dol foolish, E. dull.]
   1. To waste time in effeminate or voluptuous pleasures, or in
      idleness; to fool away time; to delay unnecessarily; to
      tarry; to trifle.
      [1913 Webster]

            We have trifled too long already; it is madness to
            dally any longer.                     --Calamy.
      [1913 Webster]

            We have put off God, and dallied with his grace.
                                                  --Barrow.
      [1913 Webster]

   2. To interchange caresses, especially with one of the
      opposite sex; to use fondling; to wanton; to sport.
      [1913 Webster]

            Not dallying with a brace of courtesans. --Shak.
      [1913 Webster]

            Our aerie . . . dallies with the wind. --Shak.
      [1913 Webster]

WordNet (r) 3.0 (2006):

dally
    v 1: behave carelessly or indifferently; "Play about with a
         young girl's affection" [syn: dally, toy, play,
         flirt]
    2: waste time; "Get busy--don't dally!" [syn: dally, dawdle]
    3: talk or behave amorously, without serious intentions; "The
       guys always try to chat up the new secretaries"; "My husband
       never flirts with other women" [syn: chat up, flirt,
       dally, butterfly, coquet, coquette, romance,
       philander, mash]
    4: consider not very seriously; "He is trifling with her"; "She
       plays with the thought of moving to Tasmania" [syn: dally,
       trifle, play]

Moby Thesaurus II by Grady Ward, 1.0:

107 Moby Thesaurus words for "dally":
   abide, await, bide, bide the issue, bill and coo, caress, copulate,
   coquet, cosset, cuddle, dabble, dally away, dandle, dawdle, delay,
   diddle, diddle away, dillydally, doodle, drag, dribble away,
   drivel away, falter, fiddle, fiddle with, fiddle-faddle,
   fidget with, finger with, flag, flirt, fondle, fool, fool around,
   fool away, fool with, fribble, fritter away, frivol, frolic,
   gambol, goof off, halt, hang about, hang around, hold everything,
   hold on, hold your horses, horse around, idle, idle away, jerk off,
   kid around, lag, lead on, linger, loiter, lollygag, make love,
   make out, mark time, mess around, monkey, monkey around,
   muddle away, neck, pet, piddle, piss away, play, play around,
   play with, poke, potter, potter away, procrastinate, put off,
   putter, rollick, romp, shilly-shally, sit tight, sit up, smatter,
   smooch, spoon, sport, stay, stay up, stick around, string along,
   sweet-talk, take time, tarry, tinker, toy, toy with, trail, trifle,
   trifle away, twiddle, wait, wait a minute, wait and see, wanton,
   waste time, while away, whisper sweet nothings