Etymology
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balmy (adj.)

c. 1500, "delicately fragrant," from balm + -y (2). Figurative use for "soft and soothing" dates from c. 1600; of breezes, air, etc. "mild, fragrant" (combining both earlier senses) it is first attested 1704. Meaning "weak-minded, idiotic," 1851, is from London slang, perhaps by confusion with barmy. Related: Balmily.

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Definitions of balmy

balmy (adj.)
informal or slang terms for mentally irregular;
it used to drive my husband balmy
Synonyms: barmy / bats / batty / bonkers / buggy / cracked / crackers / daft / dotty / fruity / haywire / kooky / kookie / loco / loony / loopy / nuts / nutty / round the bend / around the bend / wacky / whacky
balmy (adj.)
mild and pleasant;
balmy days and nights
Synonyms: mild / soft
From wordnet.princeton.edu