Interesting entry on Mormo over at the Arcana Wiki:
http://arcana.wikidot.com/mormo
Mormo is a Spirit that bites bad children. This female figure from Greek and Roman Mythology is possibly a Vampire. She may be a companion or Avatar of Hecate, the Greek goddess of the moon and magic. Very little information about Mormo has survived from classical antiquity, where she appears to have been revered in part of a mystery cult.
As with Lilith, the identity of Mormo may have started as a more general term, which then became more personified over time. Mormo appears in a few plays of Aristophanes, who uses the name as if it were a synonym for “bogey man” or “monster”.
Hippolytus of Rome, in his Refutation of all Heresies (also known as the Philosophoumena), detailed a pyromantic form of Divination that invoked Mormo, Bombo, Gorgo, Hecate, and Luna. As described by Hippolytus, the divination was nothing more than a Hoax involving pyrotechnics and a cauldron with a fake bottom, a hoax he proceeded to debunk the way one might ruin the secret of a magic trick. Therefore, Mormo might have magic and powers connected to fire.
Note that phrases from the Philosophoumena are hard to clearly define and explain. When he says “Gorgo, and Mormo, and Luna, and of many shapes,” is that calling out to three, four, or just one entity? Is Mormo just another name for Hecate, and/or the Moon? Does Gorgo refer to a Gorgon? Hecate is a three-headed goddess, and there were three Gorgon Sisters in Greek Mythology, and three names are given in that line.
In The powers of evil in Western religion, magic and folk belief, Richard Cavendish says that Mormo was a “nursery bogy” that was a source of fear for Erinna of Telos, a poetess of Ancient Greece. In the very next sentence he opines that Gorgo indeed refers to Medusa, and says the face in the moon used to be called the “Gorgon’s Head”. The face of Medusa was a common protective device in ancient greece, known as the Gorgoneion.
In The Satanic Bible, Anton Levay flips the gender of Mormo, rendering him “King of the Ghouls, Consort of Hecate”.
SO.... if Smith picked up the word MORMON by extending the word MORMO, it was a very poor choice.