[baobabKoodaa]

So the villagers of "Fucking" got together to pitch ideas for a new village name that couldn't be made fun of, and they settled on... "Fugging"?

[ThrowawayR2]

Perhaps it's just not a uncommon kind of name in that part of Europe? For example, there's the historically significant and wealthy https://en.wikipedia.org/wiki/Fugger_family which contains such august names as "Prince Hubertus Fugger von Babenhausen".

[anoncake]

It's probably the village's name in the local dialect.

[ithkuil]

There is also another town called fugging on another part of austria, that used to be spelled fucking but changed name more than a century ago. Language drift seems a reasonable guess.