According to dPal-sprul (Nyes pa’i ’phrang sgrol, p. 44) sde in sDe-dge has been interpreted as sde bzhi (i.e. phung tshog sde bzhi, see the Tshig mdzod chen mo, s.v.); and the syllable dge as in dge ba bcu, which everyone knows. This has been made even clearer in the sDe dge’i lo rgyus (p. 14). According to it, the 29th family lineage holder (gdung rabs) of what came to be known as “sDe-dge-gdung-rabs,” bSod-nams-rin-chen, paid a visit to Chos-rgyal-’phags-pa, who was on his way to Kublai Khan’s court in the year 1260. When the former arrived, the latter stated: sde bzhi dge bcu’i yon tan gyis phyug pa’i skyes bu phebs. Since then his genealogy is said to be called sDe-dge.
By the way, how come we all pronounce sDe-dge as “Derge”? People in sDe-dge do not seem to pronounce it so.
The following was posted by Dan Martin:
When I was in Oslo, I learned that people further north actually pronounce the name fairly close to the way Americans do. But in Oslo they say Oóoushlow. Nobody pronounces the hometown name like the homeys. Louisville Kentucky is Lów’vul if you’re there. Americans can hardly ever correctly pronounce any English town name apart from London, and they’re supposed to share the same language (or as we’re wont to say, divided by their common language). Does everybody pronounce the ‘r’ in Dorji? It gets so soft you’d hardly know it’s there anyway, right?