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welch (lower case) is a verb (to welch) and is nothing to do with the Welsh. I got the points but not in the right way..
It means to fail to pay ones debts. (See Merriam-Webster etc)
If you search "define welch" on Google it says the word is also spelled "welsh" - I'm guessing this is why it gave you a definition about the Welsh people.
OK, but Welsh is a proper noin. Why is it accepted?
"Xu" is a Vietnamese coin and monetary unit, and it is ALSO the English name for it, much like "peso" is a Spanish word, but ALSO the English name for the Mexican currency.
There are all sorts of inconsistencies in the way WWF decides what constitutes a word. Some acronyms and many proper nouns are accepted, while many legitimate words are rejected, like "squaw," for instance Some archaic English words are accepted, but some are not, etc., etc. We all, however, simply play be the rules as they are, do I wouldn't hold it against a player for taking advantage of a dubious rule.
What bothers ME most is the fact that SO MANY words do not have definitions in the dictionary. What kind of a dictionary lists the word, but not a definition for it?