The words levee, levy sound the same but have different meanings and spellings. Why do levee, levy sound the same even though they are completely different words?
The answer is simple: levee, levy are homophones of the English language.
An embankment raised to prevent a river from overflowing.
A small ridge or raised area bordering an irrigated field.
A landing place on a river; a pier.
To provide with a levee.
To draft into military service.
To impose or collect (a tax, for example).
To declare and wage (a war).
To confiscate property, especially in accordance with a legal judgment.
Definitions from The American Heritage® Dictionary of the English Language, 4th Edition and Wordnik.
Homophones (literally "same sound") are usually defined as words that share the same pronunciation, regardless of how they are spelled.
If they are spelled the same then they are also homographs (and homonyms); if they are spelled differently then they are also heterographs (literally "different writing").