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Wasn't "An Bhreatain Bheag" originally used to refer to Brittany in Irish too?
but what was the name of Wales then? I guess the Irish have known Wales for a longer time than Brittany

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"An Bhriotáin" is clearly based on the French "Bretagne". I think it would have been better to use "Breizh" - "An Bhréis" ("Bréiseach", "Bréisis"), perhaps.
for pity's sake...

if there's some native word there's no need to borrow the name the people of the other country give to it, and even less so if you change completely the pronunciation...
Breizh is pronounced bʁɛjs by most Finistère and Côtes dˈArmor speakers, and bʁeχ by most Morbihannais (many say bʁətaɲ too, although the name Breizh-Izel (Breton-speaking Brittany) is known everywhere thanks to canticles), nothing that sounds like an Bhréis.
If you do that, why wouldn't you say "da Ghiúnaidhtid Cingdam" and "Easpainneá" and "Dóightsleand" and "Sfeairghe" and "Eileás" etc...
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The modern meaning of the English word "British" likely altered the meaning of "Breatannach" in modern Scottish Gaelic necessitating the creation of a new term to refer to the Welsh.
By the way, what's "Breton" in S.G.? "Breatainn-Bheagach" ??

Breatnach. The adjective "Welsh" is Cuimreach. And British is Breatannach... (see faclair.com)