IPA: /ˈpɛnəli/
KK: /ˈpɛnəli/
In a manner that relates to punishment or penalties, often in the context of legal or judicial matters.
The defendant was penalized penally for his actions under the law.
Penally → It is formed from "penal" (from Latin "poenalis", meaning of punishment) and "-ly" (a suffix used to form adverbs). The word "penally" refers to something that relates to or is imposed as a punishment.
Think of 'penal' which relates to punishment, and remember that 'penally' means in a way that pertains to punishment.