From the Maven's archives:
Towhead does seem to arouse peoples' curiosity. The term, the first element of which is pronounced like "toe," means 'a head of light-colored or tousled hair', and hence 'a person with such hair'. There is also the derived form tow-headed.
Etymologically, towhead simply means 'having a head resembling tow'. What's that?, you ask. Well, as you might have guessed, there's more than one word tow. Of the two tows you're likely to encounter, the other one is the one that means 'to pull (a car, etc.) by a rope, chain, etc.'. This word is from a Germanic word meaning 'to drag'; it's related to tug.
The word tow in towhead means 'the fiber of flax, hemp, or jute, prepared for spinning'. Such fibers are both light-colored and messy, and so towhead can refer to someone with light or messy hair. The word is very often used of children.
This tow is ultimately from an Old English word 'thread; something for spinning', and is related to other Germanic words in similar senses. Towhead is an Americanism from the nineteenth century.