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Uncertain origins, although there are multiple theories.
From 和や(nagoya, “mild, calm, warm”, possibly obsolete in modern usage; the stem or precursor form of modern 和やか(nagoyaka)), in reference to either the clement weather or the relative calmness of the harbor.[1][2]
From a compound of 和(nago, “calm, mild, warm”, stem of adjectives 和し(nagoshi, “calm”, Classical) and 和やか(nagoyaka) and of verb 和む(nagomu, “to become calm”)) + 谷(ya, “valley”), in reference to the local topography.[1]
A sound shift from 根小屋(negoya, literally “root huts”), in reference to the start of the town as a collection of smaller houses at the root or foot of the mountains.[1]
By extension from 那古(nago), a place in Osaka mentioned in the Man'yōshū of 759. The name "Nagoya" in reference to the geographical area of the modern city is first mentioned in the late Kamakura period (early 1300s)) as 那古野荘(Nagoya-shō, literally “Nago Field Villa”), an agricultural estate developed earlier in the late Heian period (late 1100s).[3][4]
That said, the nago portion of the placename in Osaka is in turn likely from the same adjective root as above.