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Shawty is mostly used to refer to a young and attractive woman. Shorty is sometimes considered as a synonym for shawty. It is in some cases used as a nickname.
Perhaps the earliest recorded use of "shorty" (most commonly referring or addressed to women) were in short film episodes of The Three Stooges, dating back to the late 1930s into the 1950s. Curly Howard (and Moe) most often used the word. Curly also had several pet canines, one named "Shorty".
The term has evolved to mean a child or woman (typically because children and women are shorter in height and women had often dressed in skirts or shorties), especially an attractive woman. The most recent usage has been popularized in modern rap music.
In pop culture and hip hop, shorty has multiple meanings. In the 1980s and 1990s, the word meant "newcomer", particularly a newcomer to rap music or to certain aspects of street life or gang life. It also simply referred to someone who was younger and greener than the speaker.