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I've read that it comes from the ancient name for Ireland meaning peace. I believe this name for Ireland was from the Celtic language. The other meaning for Erin meaning western Island or Ireland is Gaelic. I'm not saying that this is correct for sure but it's what I read.
I've bought different things with my name and it's meaning on it and sometimes it says Erin means peace and other times Ireland. : ) Who knows. I wish I knew someone who speaks Gaelic or Celtic.