Yes, owly is in the scrabble dictionary

...and is worth 10 points by itself.

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Owly Definition

Seeing no better than an owl by day; purblind; blear-eyed.
from The Century Dictionary and Cyclopedia

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Top Words by points

Points

owly

10

2 letter words with OWLY

Points

lo

2

ow

5

oy

5

wo

5

yo

5

3 letter words with OWLY

Points

low

6

owl

6

yow

9

4 letter words with OWLY

Points

owly

10

yowl

10

Found 10 words in 0.1304 seconds