In 1924 they are still using 'known as'
by 1965 Bluetown, Allenwood is used in a report on chimney fires, and the name appears that way in 1968 and 1971.
It looks like Bluetown as an official name came into being only since the 1960s or possibly 1950s likely when some new houses were built.
Trying to figure out why the common name existed is always very difficult, it could be something as simple as it was a good place for Bluebells, you would need someone local if there is even anyone left who would know.