The Collaborative International Dictionary of English v.0.48:

Kelpie \Kel"pie\, Kelpy \Kel"py\, n.; pl. Kelpies. [Cf. Gael.
   cailpeach, calpach, colpach, a heifer, steer, colt, colpa a
   cow or horse.] (Scotch Myth.)
   An imaginary spirit of the waters, horselike in form,
   vulgarly believed to warn, by preternatural noises and
   lights, those who are to be drowned. --Jamieson.
   [1913 Webster]

WordNet (r) 3.0 (2006):

kelpy
    n 1: (Scottish folklore) water spirit in the form of a horse
         that likes to drown its riders [syn: kelpy, kelpie]