I've just returned from a long weekend in Bologna, Italy, and there I learnt that the word baloney in baloney sandwich is named after the town, or rather, the sausage that was first made in Bologna.
Baloney sandwich is not a well-known term in the UK, but here there is a sausage called polony, and that word, too, comes from the word Bologna.
We use the word baloney, also spelt boloney, a lot in the UK, but it means 'poppycock' or 'nonsense'. The OED says that the link with Bologna is 'conjectural', but Jonathon Green in his Dictionary of Slang refers to Ramon Adams, author of Western Words, who says that Bologna bulls are animals of inferior quality, whose meat is used to make Bologna sausage. Presumably people found the sausages inferior or 'rubbish' too, and the nonsense sense perhaps comes from this connection. Eric Partridge in A Dictionary of Slang and Unconventional English has a different theory. He thinks that boloney/baloney comes from the Romany word pelone, meaning testicles, and refers to the analogy of balls, which is slang for both testicles and nonsense.