Ok. This is where I stand corrected.

Apparently, there is a MYTH about butterfly’s ever being called flutterby’s
(although, there does seem to be a case about the mixing up the removable type..
but that’s another story)

One school of thought is just this:

1. The original name for butterfly was flutterby. (http://209.157.64.200/focus/f-news/953269/posts).
Plain and simple. But sadly, no reference. Always a bit suspect.

The other side of the argument is the linguists ..and we all know what a bunch
of poopy heads they can be.

1. What we do know, is that this word butterfly is very old (pre-8th Century).
It was originally buturfliogae, a compound of butere (butter) and fleoge (fly).
Why butter? Some suggest that it was due to many butterflies being yellow in
colour, like butter. Others believe it is based upon the yellow excrement of
butterflies. Still others hold to the notion that butterflies were thought to
land in kitchens and drink milk or butter left uncovered. [This, interestingly
enough, is supported by a very old German word for butterfly, milchdieb...which
translates broadly to milk thief.]

2. Middle English buterflie, Old English buttorfleoge (written citation 1000 C. E.)

3. The Oxford English Dictionary notes some old Dutch words "botervlieg" and
"boterschijte", and conjectures that butterflies' excrement may have been
thought to resemble butter, hence giving the name "butter-shit", then "butter-
fly". (you may not want to give this much information to small children…your call)

4. farfalla (Italian for butterfly) The pasta, farfalle, often called "bow-ties" in the US, are really butterflies.

5. Schmetterling (German). From "Schmetten", an Upper Saxon dialect loan-word
first used 16 & 17th C, from Czech "smetana", both meaning "cream", referring
to butterflies' proclivity to hover around milkpails, butterchurns, etc. Folk
belief had it that the b'flies were really witches out to steal the cream.
(As an aside, "schmettern", among other things, means "to ring out, to warble,
to twitter" -- an aural analogue of how butterflies look in flight? Latin
"pipilo/are" means "to twitter, to chirp", after all. But the German, to my
ears, sounds more like the sound a butterfly makes as a Prussian sort
accelerates down the autobahn mashing it into a smear on the windshield.)

6. "Tagfalter" is another name for butterfly, perhaps meaning "day-hinge" or
"day-folder", and "Nachtfalter" is a moth. These make semantic sense, or the
"falter" part may instead reflect the Old High German "fifaltra" derived from
the Latin.

Sigh.

Frankly, I like the idea of it being flutterby, and I am not really one to bow
in the face of convention, especially involving something as crazy as the
English language, but I am scientific enough to admit an erroneous conclusion,
and therefore recommend caution before telling a group of small children (or co-workers)
that may be considered sketchy, albeit interesting.

I'm all a flutter.