Yes, lady is a Scrabble word!
...and is worth 8 points in Scrabble, and 8 points in Words with Friends
lady
Noun
1. A polite name for any woman
2. A woman of refinement
3. A woman of the peerage in Britain
What Scrabble words can I make with the letters in lady?
4 Letter Words
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3 Letter Words
2 Letter Words