This post will deal with true Folk Etymology, where an unfamiliar word is changed into a more familiar form, or as Anatoly Lieberman puts it in Word Origins...and how we know them "the process of altering otherwise incomprehensible words, in order to give them a semblance of meaning". The other sense of Folk Etymology (called "Etymythology" by Michael Quinion in his book POSH) in which people make up plausible origins of words or phrases, was discussed in a previous post July 13.
There are two sources of unfamiliar words -- old words that have lost their meaning over time, and new words borrowed from another language. An oft quoted example of the former is bridegroom. The original was bridegome where gome was an Old English word for "man". By the 16th century gome had fallen out of use, remaining only in bridegome where it no longer made sense. The more common word groom was substituted even though at the time it referred to a manservant or person of a lower class (the horse keeper sense of groom developed more recently).
Another example is kitty-corner for diagonally opposite. The original was cater-corner where cater is an English word meaning "four" Anglicized from the French quatre. Cater developed into a verb meaning "to place diagonally". Cater is now rarely used outside this expression, so it no longer made sense, and various versions sprang up including catty-corner and the more familiar kitty-corner. It is speculated that some people thought the word had something to do with prowling cats, but I don't think this is necessary at all for the word change. Kitty-corner just seems easier to pronounce, and makes a little more sense than cater-corner. One word that does relate to cats that I had not suspected, is caterpillar which is from Old French chatepelose meaning "hairy cat".
A frequently referenced example of a word changed from a foreign language is cockroach from Spanish cucaracha (it was cacarucha with the U in a different syllable at the time it was borrowed). Cock and roach were two familiar but unrelated English words joined to approximate the new unfamiliar word.
Sometimes the translation completely changes the meaning. In America, the French Cap d'Espoir (Cape of Hope) was Americanized to Cape Despair and the place name Purgatoire (Purgatory) became Picketwire.