Frankly, I am surprised the town of Lavacolla has not changed it's name. But, the name is derived from the Latin "lavare" (to wash) and "colla" (private parts, rear)... The last half is colloquial, and derived over the centuries... Read on...
The sole, reasonably close definitions of "colla" in the Latin, Spanish and French dictionaries I consulted to write somewhat authoritatively about"what" one might be washing relates to the variations of the Latin, Spanish and French word "coller." Across languages and dictionaries, this noun refers to gluey, sticky 'stuff...' (use your imagination...) YUK! BTW and FYI, toilet tissue as such did not yet exist... EEEUW!
I defer to Camino historians out there to fill in this fuzzy, icky blank.
Anyway, back-in-the-day, the Rio Sionlla (at present day Lavacolla) was the final river to cross before entering the Holy City of Santiago de Compostela. There were other streams and creeks, but this was the sole, reliably flowing river.
Pilgrims adopted the practice of using this river as a final washing place to make themselves as presentable as they could, given the sanitary and hygienic conditions prevailing at that time.
After a final "wash," they proceeded onward, to present themselves at the Cathedral.
One note of miscellany, the Santiago Airport (SCQ) is located in Lavacolla.
I hope this helps, or at least amuses.