It's in Katakana, so it's a borrowed word. It's from the English language.
Have you watched some old cowboy movie where one of the badguys looks at a woman and says: "She's a dandy," and then he spits through his tobacco-stained teeth into a spittoon? Stands up and harasses her?
Think about the kind of woman the cowboy is describing in contrast to himself. She's classy, she's dressed well, she smells good, she's clean, etc.
It's a depricated (more in the US than in Britain) use of the English language, perhaps for this reason and perhaps not, I think. Anyway, it means 'classy'. In Japan, it happens to extend only to men. Japanese words are often misconstrued and departed from their borrowed context. Since the language is old, it would take some investigation to discover if dandy was originally meant to be used for men or women, and why it's only used for men now. It definitely means "classy", though.
I know what it looks like because I like fashion. It's kind of subjective, but you would definitely know it if you saw it from the right vantage point. If you stand on a high rise (at least two stories above a crowd), and you look down at the crowd, notice how men who wear black pants and white shirts stand out a little bit. They are dandy men. Many men wear brown suits, grey suits, blue suits, purple shirts, etc. They want to look different. For a dandy, black-and-white is just fine. Same thing every day? No problem. - A Dandy Man.
That's dandy thinking for you.