While accepting everything Squatter says I'm sure that English speaking readers in the mid fifties particularly would not have failed to make the (albeit erroneous) connection Nazgul/Nazi - particularly at a time when most people still got their news from newspapers & would have been as used to seeing 'Naz'i as well as hearing Natzi. I find it difficult to believe that at no point did the 'similarity' even cross Tolkien's mind - only to be instantly dismissed admittedly.
Of course, its possible that Tolkien didn't make the connection - but didn't his editors or proof-readers? Point being that (some/many) readers do make that connection - however unfortunate that may be in terms of encouraging 'applicability'.
Personally, I don't think its that big a deal - the two words look similar when written down, Tolkien probably noticed it, smiled about it & then forgot the whole thing.
A more interesting question, it seems to me, is what he would have done if Quenya or Sindarin had produced the name 'Jeezuls' for his monsters - you see, both Nazgul & Nazi apply to thoroughly nasty pieces of work, so the connection is not so much of a problem even if the reader makes it. If the name for Sauron's servants had been too close to the name of ultimate good, would he still not have noticed, or would he have changed it?
What I'm asking is, did Tolkien notice the similarity between Nazi & Nazgul, but feel that it was not necessary to make a fuss over it because both refer to something 'bad'?
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