Because so many sorces state different meanings for a folly a few has been listed below

Folly is pronouced FOL EE or FOL LY

The Oxford English Dictionary defines it as:
"A popular name for any costly structure considered to have shown folly in the builder,"

Chambers Dictionary defines it as:
"a great useless structure, or one left unfinished, having been begun without a reckoning of the cost."

Dictionary.com defines it as:
"a whimsical or extravagant structure built to serve as a conversation piece, lend interest to a view, commemorate a person or event, etc.: found esp. in England in the 18th century."

Cambridge Dictionary defines it as:
"Folly building (especially in Britain) a building in the form of a small castle, temple, etc, that has been built as a decoration in a large garden or park."

Longman Dictionary of Contemporary English defines it as:
"an unusual building that was built in the past as a decoration, not to be used or lived in."