I am not sure how accurate this is, but it seems relatively authoratative so I am inclined to believe it. If you would like to read more about Gallaghers, history and otherwise, click here.
Gallagher is derived from the word(s)gall-cobhair. Cobhair is the Irish word for help, although now spelt comhair, but pronounced the same.
The Gallcobhair (or the Galloglaic in some regions) were Scottish troops sent to Ireland between 1200 and 1600 to aid the Irish against their common enemy; the English. The name did not exist until this time.
Most of the Gallcobhair married and settled in Ireland,thus the name came about from the Gaelic naming system which still exists today that is:
pronounced; nee yallacore, meaning the daughter of Gallagher
The male is oGallachoir,meaning ‘from’ or ‘out of’the Gallagher.
When a woman marries a Gallagher you become uiGallachoir, meaning ‘onto’ or ‘wed to’ Gallagher. The original Ballcobhair came from many many different Scottish clans, including Macs, O’s etc…
The reason for the high population of Gallaghers in Donegal is that they(the first Gallcobhairs) were part of a dowry of an Ulster (Donegal) princess and so the earliest Gallcobhair settled there.