The settlement arose around Beauly Priory, established in 1230. It is on the north bank of River Beauly close to where it empties into the Beauly Firth. According to legend it was named Beauly after Mary Queen of Scots visited the town, and as she had spent a number of years in France, spoke French, but it was actually named by the French monks who established the priory.
More information:
http://www.undiscoveredscotland.co.uk/beauly/beauly/