According to Cassidy, the term ‘pussy’ (in its slang sense of vagina) derives from the Irish word pus. Cassidy claims that in the plural the word pusa (lips) is used for the vagina. He cites no evidence for this claim. For Cassidy, it was unnecessary to prove that Irish speakers do or even might say something. If it sounded reasonable enough to Cassidy (who spoke no Irish), it was a done deal.
So, is there any truth to this claim? Well, the word pus does exist in Irish and will be dealt with in depth elsewhere. It is the origin of the American English slang expressions “a smack in the puss” and “a sourpuss”. It is defined by Ó Dónaill as:
protruding mouth, sulky expression, pout, snout.
In other words, it is not a usual expression for lip or mouth because it has pejorative overtones. And it is not used in the plural to mean vagina. If it were, this meaning would have been mentioned in the dictionaries and especially in Ó Luineacháin’s excellent Ó Ghlíomáil go Giniúint, a dictionary of sexual terms in Irish. Furthermore, there is a very common word in Irish which does mean vagina, the word pit (pronounced roughly like the word pitch in English). It is this word which is used as the equivalent of the English pussy, not pusa.
As a final nail in the coffin of Cassidy’s theory, the word pussy is found in a number of Germanic languages: Old Norse pūss pocket, pouch, Low German pūse vulva, and Old English pusa, meaning bag. In other words, it is an ancient word of Germanic origin which is wholly at home in English, not a loanword from Irish.
You can find a discussion of the origins of the word on Wikipedia http://en.wikipedia.org/wiki/Pussy.
Chance of Cassidy being correct: Surprise, surprise – 0% again!