Surnames were a largely Norman innovation in England, so to distinguish John from Appleby from, say, John from York, one would be called John Appleby and the other John York. But this would have happened circa 11th - 13th centuries. Before then surnames were largely unknown.
Traditionally, those with a family name like Appleby, which is a locational name, have origins there. Early holders of the surname Appleby acquired it because they lived or came from a farm or hamlet where apples were grown. This could account for the early origins of clusters of families located in the south-west (particularly Somerset) and the South East of England whose surname is Appleby but do not come from a place first settled by Vikings.
As their surname is derived from a locational name, families with a name like Appleby are not neccessarily related to everyone with that name, nor even to everyone from a particular locality after which their surname was derived. That they share a common surname indicates they have their origins in the same locality and not neccessarily the same family.
Appleby was first recorded as a surname by members of a family seat of lords of the manor in places named Appleby. Its use as a surname to identify people from a locality first occurred officially in the 1167 Pipe Rolls of each county. Somewhat like today's Electorical Rolls, the Pipe rolls, sometimes called the Great rolls, were the records of the yearly audits performed by the Exchequer of the accounts and payments presented to the Treasury by the sheriffs and other royal officials; and owed their name to the shape they took.
In the 1881 census of England and Wales, there were 5054 individuals carrying the surname Appleby or close variants, 346 carrying the surname Applebee or close variants, and 72 carrying the surname Appelby or close variants.
In the case of the Applebys of Bathurst, NSW, they are descended from the De Applebys of Appleby Magna in Leicestershire. A system of feudal lordship was established across Britain after the Norman conquest of 1066; the first Lord of the Manor at Appleby Magna is believed to have been Antekil (Anthony) De Appleby. He appears to have held the manor at a date between 1114 and 1166.
The addition of the French word, "De", meaning "of", was a tradition introduced by the Normans as part of the identification of the place a lord of the manor had authority over. In time, the word was deleted from many such surnames. Antekil's decendants took on the name of the lordship as their family name, a common practice with feautal lords, confirming that the locality was named Appleby before Antekil's arrival, and that Appleby was not his family name prior to becoming lord of the manor. When Antekil's descendants moved to other locations, they kept their Appleby surname but the "de" - meaning "of" - was dropped, no doubt because they were no longer "of Appleby".
The suffix '-by' was introduced by the Viking invaders who began invading the east coast of Britain in the 8th-9th centuries. The reason so many place names ending in 'by' are found in Eastern and Northern England is because that's where the Danish Vikings established their kingdom, known as the Danelaw. The earlier Anglo-Saxon words for a settlement were 'ham,' 'tun' or 'ton' - hence Birmingham, Nottingham, Northampton, Charlton etc. Places with names like Wetherby, Grimsby, Selby, Whitby, Derby, etc are Danish in origin.
Appleby-in-Westmorland was not in Danelaw, so its name did not originate from the Danish Vikings of north eastern England. Places with names like Appleby, Kirkby, Lockerbie, Langwathby, etc in the Scottish/English Borderlands are Norse in origin from the Norse - Gael Vikings from Dublin. They settled north from the Scottish/English Borderlands, along the west coast to the Orkneys in the north, from 875. The two Appleby family groups of these areas, whilst geographical neighbours, are not related - those in the east are of Danish descent, those in the west are of Norwegian descent.
Spelling and translation were hardly exact sciences in Medieval Britain. Sound, rather than any set of rules, was the basis for spellings, so one name was often spelt in different ways even within a single document. As a surname, with variant spellings Applebe, Applebee, Applebey, and Appelbee is of Norse-Viking origin, it is a locational name from any of the various places named with the Old Norse "apall" meaning apple, plus the Old Norse "-by", a farm or settlement. These places include Appleby in Leicestershire, recorded as "Aplebi" in the Domesday Book of 1086; Appleby in Lincolnshire, appearing as "Aplebi" in the Domesday Book, and as "Appelbi" in the 1167 Pipe Rolls of that county.
There are five towns in the UK with the locational name of Appleby:
1. Appleby-in-Westmorland
2. Appleby Magna and Appleby Parva (joint location) near Birmingham
3. Appleby in Lincolnshire
4. Uppleby by Easingwold, a small village in North Yorkshire
5. Eppleby near Richmond, a small village in North Yorkshire
Other towns in the UK with a similarly derived locational name:
1. Applegarth, North Yorkshire. Garth - an enclosed garden, yard or quadrangle
2. Applegarthtown, a village in Dumfries and Galloway, Scotland
3. Appleton Manor, Nithsdale district, North Yorks.
4. Appleton Thorn, village in Cheshire (literally Appleton Town)
6. Appleton, a village in the civil parish of Appleton-with-Eaton, Oxfordshire
The locational name of Appleby was first recorded for Appleby-in-Westmorland as Appelbi in 1163. It is from Appleby-in-Westmorland that the Appleby family of Bathurst, NSW, and its surname are believed to have originated.