The Welsh <i>bwg</i> for goblin cannot be traced beyond the 1500's and is assumed to come from the Middle English <i>bugge</i> which meant a goblin or a scarecrow and can be traced to 1395.
There's also <i>bocán</i>, which is Irish for a he-goat and <i>bocan</i> which is Irish for hobgoblin. The Irish also had a goatlike battlefield wandering being called a <i>bocanách</i>.
It is assumed that the English bugge derives from the Gaelic bocan, so why the 'experts' think the Welsh bwg comes from the English is anyone's guess (except that bugge is known in earlier English texts).
Still seems arse about tit to me.