Link to CBC.
And, yes, Dildo is a real place. I looked it up. It's on the island of Newfoundland. Wikipedia:
The place name "Dildo" is attested in this area since at least 1711, though how this came to be is unknown. The origin of the word "dildo" itself is obscure. It was once used to reference a phallus-shaped pin stuck in the edging of a row boat to act as a pivot for the oar (also known as a "thole pin" or "dole pin"). It was used as early as the 16th century for a cylindrical object such as a dildo glass (test tube), for a phallus-shaped sex toy, as an insult for a "contemptuous or reviling" male, and as a refrain in ballads.....
Social scientist William Baillie Hamilton notes that Captain James Cook and his assistant Michael Lane, who mapped Newfoundland in the 1760s, often displayed a sense of humour in the place names they chose, and were not above selecting names that might "offend over-sensitive" readers....
The OED entry for the word "dildo" says the origin is unknown and finds its oldest use as an interjection — as syllables sung rhythmically (similar to "hey diddle diddle"):
1590 R. Greene Neuer too Late ii. sig. K2 Dildido dildido, Oh loue, oh loue, I feele thy rage romble below and aboue...
I'm going to assume "loue... loue" is "love... love" — not "Louie, Louie," much as I do love the idea of someone in the 16th century singing "Louie, Louie."
Later delightful quotes:
1656 S. Holland Don Zara i. vi. 57 That Gods may view, With a Dildo-doe, What we bake, and what we brew.
?1675–96 New made Medly compos'd out of Sundry Songs (single sheet) Old Obadiah sings Ave Maria, sing Lulla-by-Baby, with a Dildo....
1838 R. Southey Doctor V. 165 A story strange I will you tell..Of a woman that danced upon the rope, And so did her husband too: With a dildo, dildo, dildo, With a dildo, dildo, dee.
For the "object shaped like an erect penis," the oldest quote is from 1597, and the best quote is:
a1631 J. Donne Poems (1669) 67 She..Whom Dildoes, Bedstaves, or a velvet Glass Would be as loath to touch as Joseph was.
"Dildo" as a way to insult a person is as fresh today as it was in the 1600s:
1638 J. Ford Fancies iv. 54 The page a milke liverd Dildo....
2001 N. Weinstock As long as she needs Me 144 Marcy, get that dildo to wait another minute, will you? Get him some coffee. Spill water on him.
For a while, "dildo" was useful to refer to "A downward-hanging sausage curl on a wig."
1868 J. C. M. Bellew Poets' Corner 144 In Charles II.'s reign..the love-lock, or curl, was introduced, hanging from the nape of the neck between the shoulders. This was called the dildo, or pole-lock.
John Barth worked it into "The Sot-Weed Factor" (1960): "His wig was a campaigner, full but not extremely long, its tight curls terminating before either shoulder in pendulous corkscrewed dildos." Do people still read John Barth? It used to seem important. Post-modernism.
ADDED: I've quoted Wikipedia saying that "dildo" is "an insult for a 'contemptuous or reviling' male." That's miswritten. Surely, they meant to say it's an insult used to revile or express contempt for a man! The footnote there is to the OED, and the OED says "Originally as a general term of abuse for a boy or young man. In later use: a stupid, inept, or ridiculous person."