This curious derivation will bear some explanation. 'Eglor' was the original name of the river Tolkien later renamed the 'Nenning', but while the river's name changed, the name of the Haven at its mouth remained. (In terms of the history of Beleriand, we would have to assume that the Elves chose to rename their river, but wanted to keep the traditional name of their town). The river flowed through a narrow ravine at its mouth where Eglarest was built, hence the derivation 'Ravine of the Eglor'.
Actually the derivation of the name is more complicated than even this suggests, because the Tolkien changed his mind about the words involved, so in turn its meaning changed over time. For this reason, the name also has a connection with Eglath, 'the Forsaken', a term that at one time was particularly associated with the Falathrim who built Eglarest. Based on that phase of linguistic development, the name can be reinterpreted as the 'ravine of the Forsaken' (where the Forsaken were the Sindar left behind in Beleriand when their fellow Teleri passed across the Great Sea).
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