I heard native speakers saying "Helau" as a greeting, What's the etymology of the word?
There is another quite interesting explanation given on Karneval.org:
By this the carnival greeting "Helau" originated from a burlesque ("Fastnachtsspiel") played in Düsseldorf in 1833, the date when carnival beacame officially mentioned there.
Digging the etymology further down to the question why they used "Helau" in the burlesque may come to the point that it simply was a salutation. We have a nice Wikipedia summary on the origin of the English "Hello" (pronounced very similarly):
But here a -imho- better explanation:
Helau stems from Hellauf which means hell auflachen. The f is elided.(WISSEN)