Still, butterfly is a funny thing to call a butterfly, isn’t it? It’s also not obvious exactly what the compound means—okay, so it’s probably right-headed, and therefore refers to some sort of flying insect. But what, exactly, is the relation between the ‘butter’ part and the ‘fly’ part? (OED sez: “The reason of the name is unknown,” but offers some speculation, to which I return below.) There are several possibilities. I hope that the Language Loggers will forgive me for saying this, but Sanskrit has at least four words for ‘compound’, and I intend to use them here to illustrate the multiplicity of possible meanings of butterfly.
And so he does; I’ll quote here my favorite:
Butterfly could be a tatpurusha compound, in which the relation is one of interaction rather than resemblance. For example, a butterfly could be an insect that eats butter, in which case one would have to wonder, as Alice did of the bread-and-butter fly, how it could possibly survive without human intervention. Or it could be quite the reverse—an insect that shits butter, as suggested by the OED: “Wedgwood points out a Dutch synonym boterschijte in Kilian, which suggests that the insect was so called from the appearance of its excrement.” Trouble is, as A World for Butterflies points out, butterflies don’t shit. (Caterpillars do, though, and apparently there is one species that, thanks to a diet of yellow flowers, does emit appropriately coloured frass. (Yes, caterpillar shit is called frass, and yes, it’s derived from fressen. The OED defines frass as “the excrement of larvæ; also, the refuse left behind by boring insects,” and although I’m sure Nabokov (whose birthday was Earth Day) would have insisted that there are no boring insects, I will not.))
Now, there’s a man who knows how to parenthesize (and yes, that is a word; Southey wrote (in his “unfinished and, indeed, unfinishable” The Doctor, which sounds quite intriguing from this description and which includes the first published version of “The Story of the Three Bears”): “Sir Kenelm Digby observes… that ‘it is a common speech (but’, he parenthesizes, ‘only amongst the unlearned sort) ubi tres medici duo athei’.”).
(Via Mark Liberman at Language Log.)