Possibly due to bureaucratic sensitivities, Irish language Minister Eamon O Cuiv ordered the village's Gaelic name be changed to simply An Dun, or the Fort.
The unpopular move resulted in about 1,000 locals signing a petition seeking to have 'harlot' added back to the name. They were backed by local politicians and a Limerick County Council motion of support.
O Cuiv asked the country's Placenames Commission, the official arbiter of Gaelic names, to "consider afresh" their advice.
In a statement, he said the commission had confirmed its view that "An Dun" is the "appropriate Irish version" of the name, but has also confirmed that the alternative "Dun Bleisce" has an "attested historical basis".
Having considered the matter carefully, the minister said that "as there is historical evidence to support both versions of the Irish name, I am open to accede to their request and it is legally permissible within the existing legislation for me to do so".
O Cuiv said he had published a draft order to change the village's name back, and that he welcomed further comments from the public.
"Assuming no strong objections are received, I propose to make the order in four weeks' time," he said
Local councillor Mary Jackman said she was absolutely delighted for the local people.
"I am really thrilled. Signposts had always been Dun Bleisce and I think it was bureaucracy or a little glitch in interpretation that changed it," she told AFP.
Jackman said the literal translation of the Gaelic word may be harlot but the woman who the village was named after in ancient times may not have been a harlot in the sense of the term today.
"I believe that blesc was not a derogatory term in those days. It would have meant that she was a strong or powerful woman in the locality," she said.
©AFP