“Keltic” versus “seltic” is one of those “religious issues.” I’ve checked all the major English dictionaries, including my two personal favorites, the American Heritage Unabridged third Edition and the Oxford English Dictionary. All of the dictionaries agree; either pronunciation is acceptable, though “keltic” is preferred, and is usually listed first.
I prefer “keltic,” and so do most of the English-speaking Medievalists and Celticists (that’s “kelticists”) I know. There are some who argue that “keltic” is the “correct” pronunciation because both Irish and Welsh use the letter C to indicate the sound represented by the letter K in English. This is a spurious argument since the ancient Celts did not refer to themselves as “Celts.” The word Celt is derived from Keltoi, the name the Greeks gave the “barbarian” tribes along the Danube and Rhone rivers. The Romans borrowed the Greek name, but spelled it Celtae, and the word entered French in the form Celtes, from which English derives Celt. The argument over whether “selt” or “kelt” is “correct” is probably ultimately related to the word entering English twice, once through French, and once, probably through the publications of German scholars, from the Greek Keltoi, hence “kelt.” (See the etymology and usage note in the American Heritage Dictionary.
When I’m asked whether “keltic” or “seltic” is correct, I like to point out that by preferring “keltic” one avoids confusing the speakers of an Indo-European language with professional basketball players (in Boston) or football players (in Glasgow). But, either pronunciation is technically “korrect.”