bedlam (n.)

"scene of mad confusion," 1660s, from colloquial pronunciation of "Hospital of Saint Mary of Bethlehem" in London, founded 1247 as a priory, mentioned as a hospital 1330 and as a lunatic hospital 1402; it was converted to a civic lunatic asylum on dissolution of the monasteries in 1547. It was spelled Bedlem in a will from 1418, and Betleem is recorded as a spelling of Bethlehem in Judea from 971.

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Definitions of bedlam from WordNet
bedlam (n.)
a state of extreme confusion and disorder;
Synonyms: chaos / pandemonium / topsy-turvydom / topsy-turvyness
Bedlam (n.)
pejorative terms for an insane asylum;
Synonyms: booby hatch / crazy house / cuckoo's nest / funny farm / funny house / loony bin / madhouse / nut house / nuthouse / sanatorium / snake pit