The slur against the English should have been a compliment.
With perhaps the word’s earliest printed use in 1888, limey is a shortened form of lime-juicer, which has been documented since at least 1857. The insult was a reference to British seafarers drinking lime juice issued by the Royal Navy to prevent scurvy, a sickness brought on by a deficiency of Vitamin C.
The disease, which caused sailors to fatigue, lose teeth, suffer swollen gums, and even die, had plagued British mariners for centuries. Then, in 1747 a Scottish doctor named James Lind conducted a clinical trial proving that consuming citrus fruits could thwart the illness.
After these findings, naval ships at sea longer than a month started distributing juice squeezed from lemons and limes.