Denis Buggy's answer to your query is the much believed theory.O'Baigh (or something similar in the gaelic)meaning soft or boggy.
Some of my uncle John "The Yank" Buggy's papers were for John Boggy,even though his brother (my father) Eddie Buggy was Buggy,whilst another brother Tom was named as Bogie.
A lot of the spelling of names, even lately were down to the brogue of the person relaying the information and the literacy of the person entering it somewhere.
However being interested in genealogy myself,I have come across families living in Scandanavia in the early 16th century called Bugge^.Also families in Southern England from as far back as Jep Buggie 1385 and Robert Buggy in Suffolk in 1490.
They had forenames very common in our family e.g.,Thomas,John,Ann,Brigitte,Michael etc.
Which makes one half belief another theory, that our family name originated in Scandanavia whereupon they travelled through the mainland to Southern England ,over to the continent,back to England and over to Ireland.
It is very difficult to get any information regarding The Buggy's around Kilkenny prior to 1780 approx.
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