Probably an Americanized form of Spanish Palacio, Italian Palazzo, or French Palais, which is in some cases a habitational name, from places in Morbihan and Haute-Vienne called Le Palais or from Palais-du-Cros in Puy-de-Dôme, but in the South is from a vernacular form of the Latin personal name Palladius (Greek Palladios).
See the Key to the Dictionary or consult the General Introduction for further explanation.