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The Collaborative International Dictionary
By the sly

Sly \Sly\, a. [Compar. Slieror Slyer; superl. Sliest or Slyest.] [OE. sli, slegh, sleih, Icel. sl?gr, for sl?gr; akin to Sw. slug, Dan. slu, LG. slou, G. schlau; probably to E. slay, v.t.; cf. G. verschlagen sly. See Slay, v. t., and cf. Sleight.]

  1. Dexterous in performing an action, so as to escape notice; nimble; skillful; cautious; shrewd; knowing; -- in a good sense.

    Be ye sly as serpents, and simple as doves.
    --Wyclif (Matt. x. 16).

    Whom graver age And long experience hath made wise and sly.
    --Fairfax.

  2. Artfully cunning; secretly mischievous; wily.

    For my sly wiles and subtle craftiness, The litle of the kingdom I possess.
    --Spenser.

  3. Done with, and marked by, artful and dexterous secrecy; subtle; as, a sly trick.

    Envy works in a sly and imperceptible manner.
    --I. Watts.

  4. Light or delicate; slight; thin. [Obs.]

    By the sly, or On the sly, in a sly or secret manner. [Colloq.] ``Gazed on Hetty's charms by the sly.''
    --G. Eliot.

    Sly goose (Zo["o]l.), the common sheldrake; -- so named from its craftiness.

    Syn: Cunning; crafty; subtile; wily. See Cunning.

Wiktionary
by the sly

adv. (context dated English) on the sly