I believe it does drag down the value simply because a general search on daft may bring up five to six times more the amount of houses for sale (over supply) than are actually available to buy in the specific area search, giving the buyer much bigger choice..but a misleading choice. Buyers are misdirected under the impression they are getting a bargain until this price becomes normal to affect prices in the real townland area because sellers houses remaining unsold. I also hardly think that comparing rural areas to urban is the same. Its quite obvious in rural areas but urban areas are easier to deceive townland borders.
Your belief does not constitute evidence.
Am going to hazard a guess you are attempting to sell a property and it isn't moving at the price you want to sell it at. A search on property websites is showing you cheaper properties in the general area and you think that that is the reason that no-one is looking at your place, or not offering you the money you want. I hate to tell you this but that is not because the townland boundaries are not being "honoured". Anyone spending Castleknock and environs prices will be doing a great deal of homework and will definitely be looking to maximise their outcome. They will be acutely aware of what and where they are getting for their money and will be expecting to view not-quite-Castleknock properties in the hope of finding something more for a little bit less.
It is highly unlikely that they are
only looking for something with the word "Castleknock" appended somewhere - however egregiously. They are far more likely looking for property within the vicinity of Castleknock or in North west Dublin, or near Blanchardstown hospital, that has x bedrooms, y bathrooms, etc., is close to schools/shops/transport (delete as appropriate). Your putative "protection" provides them with nothing. You aren't dealing with naivety, you are dealing with people who know the price they pay for your property is inflated because of an address - however nice your place is, you are pricing it far above its replacement value because it is "in Castleknock" - not everyone is so desirous of spending for that privilege and may be very happy to settle for a better house in a slightly less salubrious neighbourhood as long as it meets their actual, logical criteria. Your suggested law would not make them any more likely to spend an exorbitant amount of money. They will simply adjust their search to look in the townlands you disparage.
Furthermore, the ingrained presumption seems to be that the current prosperity and desirability of Castleknock compared with some other areas in the vicinity is immutable. This is not necessarily the case. Areas go up and areas go down. It doesn't happen over months but it can happen over decades. Even incredibly expensive neighbourhoods can become less desirable with time and gentrification of other areas is not unusual at all. Granting it the "protection" of only ever being known as "Castleknock" doesn't prevent changes in fortune.
As a final point - Askea is definitely urban not rural - hence the reason I picked it, it is a townland within the boundaries of a town, like so many others, but it happens to be one I know well. In an actual rural area (i.e. defined as not in a town or a city) a townland is useful information and would be a necessity for identifying the location of a property. In towns and cities - not so much.