That's sort of what I was thinking of, I think. "If 'switch' can mean a wooden rod, maybe the word can also mean a small tree, and from there a small forest, so that would add up as the forest outside the village of Holminster."

Wrong guess, apparently, but it made sense at the time.

Having double-checked the quest dialogue for The Lightwardens it seems more that Holminster Switch is the name of the village itself (I may have previously misread the "village lies beyond" line about the staging point), so whatever the exact meaning of it is, the whole dungeon title is just a place name and not "something happening to Holminster".