The words ugli, ugly sound the same but have different meanings and spellings. Why do ugli, ugly sound the same even though they are completely different words?
The answer is simple: ugli, ugly are homophones of the English language.
A cross between a tangerine and grapefruit, grown in the West Indies.
Displeasing to the eye; unsightly.
Repulsive or offensive; objectionable: an ugly remark.
Chiefly Southern U.S. Rude: Don't be ugly with me.
New England Unmanageable. Used of animals, especially cows or horses.
Definitions from Wiktionary, Creative Commons Attribution/Share-Alike License, 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").