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From The Collaborative International Dictionary of English v.0.48:
Gully \Gul"ly\, n.; pl. Gullies. [Formerly gullet.] 1. A channel or hollow worn in the earth by a current of water; a short deep portion of a torrent's bed when dry. [1913 Webster] 2. A grooved iron rail or tram plate. [Eng.] [1913 Webster] Gully gut, a glutton. [Obs.] --Chapman. Gully hole, the opening through which gutters discharge surface water. [1913 Webster]