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My theory has always been that now it's simply a tradition, but that in the beginning it was quite easy to derive Meg from Marguerite (and Margaret). They are both large names for a small baby, and it would be natural to shorten them. Now, enter the person responsible for the change from Meg to Peg: the slightly older sibling with a cold!

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I'm serious. This is the kind of thing that happens, and that all the respectable old gentlemen who wrote the first etymologies wouldn't know about because bringing up tiny children wasn't their domestic duty. Enter, as I say, a toddler with a blocked nose. It does its best to greet the baby - Hello, Meg - but it comes out more like Heddo, Peg . And this could easily catch on in the family; it is funny, and cute, and especially if the baby happens to smile or gurgle when she hears it, she'll very likely be stuck with it.

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Same as Polly from Molly, and probably Bob from Rob and Dick from Rick, though those would require a stuffy nose of heroic proportions ...