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"Lady" is also the customary title of the wife of a baronet or knight; the proper title, now only used in legal documents or on sepulchral monuments, is "Dame"; in the latter case the usage is to prefix "Dame" to the given name of the wife followed by the surname of the husband, thus Dame Jane Smith, but in the former, "Lady" with the surname of the husband only, Sir John and The Lady Smith. When a wife divorces a knight and he marries again, the new wife will be The Lady Smith while the previous wife becomes Jane, Lady Smith. If he then dies his widow becomes Dowager Lady Smith (no the). During the 15th and 16th centuries princesses or daughters of the blood royal were usually known by their first names with "The Lady" prefixed, e.g. The Lady Elizabeth.


Source from : http://en.wikipedia.org/wiki