Walter m. Old High German walt 'power, authority' + Old English here, Old High German heri 'host, army'.
The English diminutives Wat, Watt, and Watte are witnessed in 1379 in the relational bynames Watmañ (WRYPT1 p. 136), Wattsoñ (WRYPT1 p. 152), and Wattessoñ (WRYPT1 p. 21).