From Zelda Legends Wiki
Submitted by Johan:
Although Lost Woods is a rather nice name, it is a rather simplified translation. It is not really wrong, but I think some explanation should be made. The japanese name of the aforementioned place is: Mayoi no Mori.
Mori is not Woods. In japanese, woods is translated with the word "hayashi". Forest is translated as "mori". For example. Kokiri Mori (Kokiri Forest). "Mayoikomu" means being lost. However, "mayoi" is a noun (same Kanji though), and has the following meaning: まよい mayoi (n) hesitation/bewilderment/doubt/indecision/infatuation/Buddhism maya. In my own dictionary, mayoi is translated as "perplexity", while mayou means "get lost/hesitate".
In this context however, mayoi + no will become an adjective, so maybe the most correct reading should be "Perplexed Forest" (however, the meaning is something like: "fairy tale forest where you get lost...". It is quite complicated actually!). Any thoughts on this matter?