Does “gay” still include the meaning “merry”?
I would say that the word gay means ‘homosexual’ only, with two caveats:
- A lot of people, especially young people, use gay as a generic adjective meaning ‘bad’ or ‘lame’. This is, of course, considered inappropriate and rude by polite society, but use of gay in this way is pervasive in situations where there are a lot of young people, such as video gaming communities (like XBox Live).
- People are definitely aware that gay used to mean ‘happy’, ‘merry’, or ‘lively’. The theme song to The Flintstones talks about a gay old time, and many people know that this usage at one time was predominant. There is a similar situation with the word queer. Some people might use gay to mean ‘merry’, but only in a tongue-in-cheek or double-entendre kind of way. The Corpus of Contemporary American English, for example, has two examples of “gay old time”, one from 1993, and one from 1994. There is one more example that is from the big screen adaptation of The Flintstones, also released in 1994.
In contemporary English, I would say that yes, gay means homosexual only.
Its original meaning was, as you mention, merry or lively, and you will certainly see it used this way if you look at written English from a few decades ago. However, it's very unlikely you'd see it used that way today.
In commonly used English today, "gay" has become interchangeable with "homosexual" and most readers will understand it in that way, either as an adjective or as a noun. Though I'm not a fan of the plural form "gays".
As always, though, context is the most important thing because the English language is fabulously ambiguous towards the meaning of gay. There are certain phrases, which admittedly are not in common usage, but where the reader would understand that the word gay would not mean "homosexual" unless there was a clear double meaning, e.g. "gay hue" or "gay abandon". Also, applying gay to transient things, such as a mood, would probably alert the reader to the fact you did indeed mean "happy".
In addition, "gaily" and "gaiety" would not be generally understood as pertaining to homosexuality though they are usually only used in archaic contexts. Unless perhaps the writer meant "gaiety" in terms of stereotypical homosexual behaviour, e.g. "there was much gaiety" could mean "everyone was acting in a very camp manner", or perhaps something like "there were many men who were proud to be gay".
Personally, because I am caught between favouring clear and concise language and loving the use of flowery, overblown and overwrought, archaic language, I try to reserve the word gay for when I mean "merry". I also enjoy the possibilities of secondary meanings.
Gay is also a last name. My high school music teacher was Mrs. Gay.
I disagree with every answer that says Gay only means homosexual, especially when the question already points out that there is a place named Fort Gay. That's the kind of thinking that got Microsoft in hot water in the first place.