Wiktionary
alt. (context Australia slang English) a rumour, or an erroneous or improbable story. n. (context Australia slang English) a rumour, or an erroneous or improbable story.
Wikipedia
A furphy is Australian slang for an erroneous or improbable story that is claimed to be factual. Furphies are supposedly 'heard' from reputable sources, sometimes secondhand or thirdhand, and widely believed until discounted. The word is said to derive from water carts designed and made by a company established by John Furphy: J. Furphy & Sons of Shepparton, Victoria. The steel and cast iron tanks were first made in the 1880s and were used on farms and by stock agents. Many Furphy water carts were used to take water to Australian Army personnel during World War I in Australia, Europe and the Middle East. The carts, with "J. Furphy & Sons" written on their tanks, became popular as gathering places where soldiers could exchange gossip, rumours and fanciful tales — much like today's water cooler discussion.
In his book "Gallipoli", Peter Fitzsimons suggests that the term furphy originated from a training camp at Broadmeadows, Victoria where a chap of the name Furphy would spread rumours of the embarkation date for the troops to go to Europe to assist the British Empire in the Great War.
Another suggested explanation is that the rumbling of an approaching water cart sounded like the firing of artillery, thus causing a false alarm. It is also used to refer to a foolish mistake, although the etymology of that is uncertain.
It is possible that the word was also influenced by John Furphy's equally prominent brother, the popular 19th-century Australian author Joseph Furphy (1843–1913). However, Joseph was generally published under the pseudonym "Tom Collins".
Scuttlebutt has a similar etymology, a scuttlebutt originally being a cask of drinking water on a ship.
The Furphy family businesses (J. Furphy & Sons and Furphy Foundry) were established in 1864 and as a part of the 150 year celebrations a museum has been opened in Shepparton, Australia.
Usage examples of "furphy".
For permission to quote from unpublished letters of Furphy in the National Library, Canberra, I thank Mr Kenneth Binns, former Commonwealth Librarian.