From ErfWiki

Proposed Canon

Otoh is one of the two lesser cities of Kingdom of Faq. Like Kibo, it is level two, and described by Vinny Doombats as a glorified farm.^{summer-updates-037}

Speculation

Otoh is likely the same name the city had under King Banhammer.

Reference

OTOH may stand for, "On The Other Hand."

This could relate to the philosophical history of the kingdom. In philosophical discussion, many different points of view are taken into consideration. Taken further, we may assume there are different options available to the people in Erfworld, such as the one taken by King Banhammer.