You got that right. The surname Loizou was indeed a first name and passed as a surname during the British colonization. My father told me this once.
During the registration (Census) of people, so many people were uneducated back in the late 1800, early 1900 that they were only known by a single name, so they british used their first name as last name too. For instance somebody called Loizos with no last name, they would assign one to him by calling him Loizos Loizou. There are thousands of examples like this one. Another would be, Kuriakos Kuriakou, John Joannou e.t.c
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