The Oxford Companion to Music describes a hurdy-gurdy thus:

  "A stringed instrument, somewhat of the violin type, played by
turning with the right hand, a handle which operates a rosined wheel
(in effect a circular bow), and by depressing with the left hand a few
finger-keys like those of a piano.  These latter operate an internal
mechanism functioning somewhat like the fingers of the left hand of a
violinist.  Two of its strings produce a continuously sounding low note
and hence resemble in function the drone of a bagpipe."

There is much more, but the entry concludes:

  "The vulgar application of the name 'hurdy gurdy' to the once popular
street piano arises probably from the facts (a) that the latter largely
superseded the former as a means of street entertainment and (b) that
both are played by turning a handle."

I have an excellent photograph of a busker that I saw playing a
hurdy-gurdy outside York Minster.

David S. Smith