Tolkien explicitly stated that it was in origin a Dwarven name. Since we also have "Felagund" from Kh.: "felak-gundu" or hewer of caves, the "Gunda-" part of the name must refer to the caves within it.
I'm sure someone ought to be able to nail the name completely.
--Osric 12:38, 14 November 2006 (EST)