kelpie

n. Australian sheepdog; malevolent water spirit shaped like a horse that lures people to death by drowning (Scottish legend) 

The kelpie is a supernatural shape-shifting water horse from Celtic folklore that is believed to haunt the rivers and lochs of Scotland and Ireland. It generally has grayish black fur, and will appear to be a lost pony, but can be identified by its constantly dripping mane. its skin is like that of a seal but is deathly cold to the touch. In Orkney a similar creature was called the Nuggle, and in Shetland a similar creature was called the Shoopiltee, the Njogel, or the Tangi . It also appears in Scandinavian folklore where in Sweden it is known by the name Bäckahästen, the brook horse. In Norway it is called nøkken, where the horse shape is often used, but is not its true form.
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Noun
1. (Scottish folklore) water spirit in the form of a horse that likes to drown its riders
(synonym) kelpy
(hypernym) evil spirit
(classification) folklore
(classification) Scotland
2. an Australian sheepdog with pointed ears
(hypernym) shepherd dog, sheepdog, sheep dog

(n.)
Alt. of Kelpy
  

[Folklore] In old Scotland, the Kelpie is a treacherous water devil who lurks in lakes and rivers. It usually assumes the shape of a young horse. When a tired traveler stops by a lake to rest or to have a drink, he would see a horse, apparently peacefully grazing. When he mounts the horse, the Kelpie dives into the water, but besides wet clothes, the rider gets away unharmed.