The municipality (originally the parish) is named after the old Vegusdal farm () since the first Vegusdal Church was built there. The first element is derived from the old male name, Veikolfr.
The municipality, which was once a parish, takes its name from the old Vegusdal farm () because the first Vegusdal Church was built in that area. The primary element is derived from the old male name, Veikolfr.