The Irish name of the post office of Gracehill is the same as the Irish name of the townland in which it is situated, Baile Uí Chinnéide/Ballykennedy, 'the townland of Ó Cinnéide'.
O'Laverty explains the origin of Gracehill as follows: “Gracehill is the name given to the village erected in the townland of Ballykennedy by the Moravians, a sect established by a German, Count Zinzendorf, who died in 1760. A colony of this sect was established in Ireland, about the year 1746, by one of their ministers, named Cennick. In 1755 they obtained from Charles O’Neill, of Shane’s Castle, a lease, renewable forever, of their present holding” O’Laverty, Down and Connor, III, 391.