Annually is from annual plus -ly. The suffix -ly recasts annual as an adverb: the lexical idea remains recognizable, but the word now describes manner, degree, or circumstance rather than naming the quality by itself. In use as an adverb, annually denotes once a year; every year. Typical contexts include “The music festival is held annually at the end of May”. The meaning stays close to the form: it applies the etymological material to once a year; every year, keeping the visible parts legible in ordinary use.