It looks like the "word" my 3-year old nephew formed by haphazardly adding random letter tiles. LOL
How do you even pronounce it?!?

Lol, it sounds a bit like that, yes!
Here's a song explaining how to say it:
http://www.youtube.com/watch?v=1BXKsQ2nbno 
Llanfairpwllgwyngyllgogerychwyrndrobwllllantysiliogogogoch?
Yeah, that's a litecoin address.

Haha, would have been quite awesome if it was real!

the moment I saw the name I though of Finland or something around the region (another volcano island or something), I wasn't that far, but still surprised by the location
Nah, finnish towns has names like: "Roollujuntäävijokkanen" and stuff, (Kollujuntäävijokkanen was completely made up by me though)! But there is a finnish town with a really long name: Äteritsiputeritsipuolilautatsijänkä!

I wasn't sure if you were making that up until I Googled it.
same here..! the first thing i did after reading OP is selected the text rigt clicked and clicked on " Search google for Llanf....." and i was surprised when it turned out to be a real place..!
i also think that maybe OP is just kidding

anyway probably the person who named that town is drunk at that time or gone nuts

No
He was just welsh!
