Allerby was originally called " 'Ailward's', that is 'Æðelward's, Crosby', afterwards reduced to 'Ailward's bȳ'."[1] So, "the village or hamlet of Ailward". (Bȳ is Old English from the Old Norsebýr, meaning 'village' or 'hamlet'.)
References
^Armstrong, A. M.; Mawer, A.; Stenton, F. M.; Dickens, B. (1950). The place-names of Cumberland. English Place-Name Society, vol.xxi. Vol. Part 2. Cambridge: Cambridge University Press. p. 306.