Chinese: Mandarin form of the surname 廖 meaning ‘spacious empty’ in ancient Chinese: (i) from the personal name of Liao Shu An (廖叔安) an official who lived during the Xia dynasty (2070–1600 BC) who is said to have been the founder of an ancient state called Liao (廖) located in Henan province. (ii) from the second element of the personal name Bo Liao (伯廖) said to be name of one of the sons of King Wen of Zhou (1152–1056 BC). or a son of an official in the state of Zheng (located in part of present-day Shaanxi and Henan provinces) during the Spring and Autumn period (770–476 BC). (iii) adopted in place of two other Chinese surnames Miu (繆) and Yan (顏). Some bearers of these two surnames migrated to live on the north bank of the Yellow River where they changed their surname to Liao (廖) during the reign of Zhou the last king of the Shang dynasty (1600–1046 BC).
Source: Dictionary of American Family Names ©2013, Oxford University Press