I copied this from another website:
"The name Wallace is now famous throughout the world, thanks in large part to Mel Gibson's film Braveheart - the tale of William Wallace, regarded by many as one of Scotland's greatest heroes. There are two commonly held opinions as to the origin of the surname Wallace. Some say it originated in the Latin word representing denizens of the ancient kingdom of the Strathclyde Britons: "wallensis". Another theory is that the name comes from the Anglo-Norman French term, "le waleis" - meaning, "stranger" or even "foreigner", and denoted people who were either of Scots, Welsh or Breton origin. The medieval period came to have the surname Wallace."