sexually attracted to someone who is the same sex
of, relating to, or used by homosexuals
happy and excited : cheerful and livel

http://dictionary.reference.com/browse/gay

“Miss Furr and Miss Skeene” by Gertrude Stein

The word “gay” is widely used throughout the text (136 times, to be more exact). Back when it was written, in 1925, the word in question had exclusively the connotation of “happy and excited : cheerful and lively”. Many people attribute Stein’s work for having baptized the term with the meaning “homosexual”, as we are used to nowadays, due to the homoerotic-charged feel of the essay.

The word “gay” and its meanings through out history have been recently and constantly questioned, and in some cases battled. It is a popular belief that until the middle of the 20th century the term referred primarily to being happy, and had no sexual connotations whatsoever. the term itself was not used by the general public until the 1950’s but it was used within the homosexual community as a way of describing themselves by at least 1920. It is, however, doubtful that the general public would use the term. When “Miss Furr and Miss Skeene” was published in Vanity Fair in 1923.