Hypocorism
A hypocorism (; from Greek ὑποκορίζεσθαι hypokorizesthai, "to use child-talk"), also known as a pet name or calling name, is a shorter or diminutive form of a word or given name, for example, when used in more intimate situations as a nickname or term of endearment. However, shortening of names is certainly not exclusive to terms of affection; indeed, in many cases, a shortened name can also be used to intimidate or humiliate. The ambiguity would need to be clarified by context.
Derivation
Hypocorisms are often generated as:
a reduction (in English) of a longer word to a single syllable, then adding -y or -ie to the end, such as movie ("moving picture"), telly ("television") or Aussie ("Australian").
a contracted form of a personal name, such as Tony from Anthony, Rosy for Rosemarie or Vicky from Victoria.
a baby-talk form approximating the name's pronunciation, such as Bess for Elizabeth.