Don't validate names, use transliteration to make them safe for postal services (or whatever). In SQL this is COLLATE, in the command line you can use uconv:
>echo "'Lódź'" | uconv -f "UTF-8" -t "UTF-8" -x "Latin-ASCII"
>'Lodz'
>echo "'Lódź'" | uconv -f "UTF-8" -t "UTF-8" -x "Latin-ASCII"
>'Lodz'
Why would it be transliterated with an Л? And an О? And a з? None of this makes sense.
Because it _used_ to be pronounced this way in Polish! "Ł" pronounced as "L" sounds "theatrical" these days, but it was more common in the past.
This happens all the time when names and loanwords get dragged across linguistic boundaries. Sometimes it results from an attempt to "simplify" the respective spelling and/or sounds (by mapping them into tokens more familiar in the local environment); sometimes there's a more complex process behind it; and other times it just happens for various obscure historical reasons.
And the mangling/degradation definitely happens in both directions: hence Москва → Moscow, Paris → Париж.
In this particular case, it may have been an attempt to transliterate from the original Polish name (Łódź), more "canonically" into Russian. Based on the idea that the Polish Ł (which sounds much closer to an English "w" than to a Russian "в") is logically closer to the Russian "Л" (as this actually makes sense in terms of how the two sounds are formed). And accordingly for the other weird-seeming mappings. Then again it could have just ended up that way for obscure etymological reasons.
Either way, how one can be "irritated as hell" over any of this (other than in some jocular or metaphorical sense) is another matter altogether, which I admit is a bit past me.
https://en.wikipedia.org/wiki/%C4%8Celje
echo "Čelje" | uconv -f "UTF-8" -t "UTF-8" -x "Latin-ASCII"
> "Celje"
https://en.wikipedia.org/wiki/Celje
(i mean... we do have postal numbers just for problems like this, but both Štefan and Stefan are not-so-uncommon male names over here, so are Jozef and Jožef, etc.)
If you have control over the encoding on the input side and on the output side, you should just use UTF-8 or something comparable. If you don't, you have to try to get something useful on the output side.
Everyone over here would know that "ÄŒelje" (?elje) is either čelje, šelje or želje. Maybe even đelje or ćelje if it's a name or something else. So, special attention would be taken to 'decypher' what was meant here.
But if you see "Celje", you assume it's actually Celje (a much larger city than Čelje) and not one of those variants above. And noone will bother with figuring out if part of a letter is missing, it'll just get sent to Celje.
And no, we don't use "postal numbers for humans".
An email, a phone number, a tax or social security number, demographic identifier, billing/contract number or combination of them.
All of those will help you tell Stefan from Štefan in the most practical situations.
>But if someone runs that script above and transliterates "š" to "s" it can cause confusion.
It's not nice, it will certainly make Štefan unhappy, but it's not like you will debit the money from the wrong account or deliver to a different address or contact the wrong customer because of that.