I wouldn’t say it’s common, but it’s well known. It’s kind of old-fashioned.
I feel like I have, but maybe just in British novels? At any rate, I agree with everyone else. It’s a mild insult that you might apply to yourself or someone you like, perhaps most often in the form “don’t be daft” (i.e., don’t do/say that silly thing.)
…in fact, I just thought: it’s the sort of word Michael Parkinson would use; and a moment’s googling shows that he actually wrote a book called Football Daft.
(Yorkshireman Michael Parkinson is/was a writer/broadcaster/talk show host.)
Very common here in West Yorkshire to describe something as a ‘daft idea’ - like a three foot long cycle lane - or floor hazard sign that is placed right in a walkway where you can trip over it.
I grew up in Bedforshire/South Buckinghamshire and west London , daft was pretty commonly used.
My dear old Grandma was Scottish, and she’d tell me and my sisters “don’t be daft” if we were acting up. It was the mildest of perjoratives, equivalent of “stop being silly”. At least that’s how we took it…
I’ll be darned. All this time, I thought daft meant crazy, not merely foolish. I thought it was a slightly polite way of saying that someone has lost his marbles, gone 'round the bend, or had bats in his belfry. I guess I was being more charitable than I thought. I guess it’s too late to go back and tell those people I meant to say they were fing nuts.
Well know as a term or as a name? I’d be surprised if many Americans were aware of any other context other than the name of a certain cartoon duck.
You might sometimes (in less sensitive times and contexts) hear someone referred to as a “dafty” as an alternative to “a bit simple”, but that’s much rarer than the mild usage we’re used to over here. I’ve never heard it as a synonym for madness, or anything as alarming as that.
This demonstrates the secondary meaning I was referring to; Football Daft means Football crazy - as in he really, really, really likes football.