It's amazing how everybody is so quick to dismiss the general public as "stupid" just because they are not familiar with some domain specific terminology.
I don't think anyone says the public is stupid because they don't know what Dihydrogen Monoxide is. The problem is that no one saw the need to do a one minute wikipedia search for the term before panicking and calling the local authorities. Because that is stupid.
How much you want to bet the water company didn't know the chemical name of water is dihydrogen monoxide? Otherwise they could have explained to the callers that dihydrogen monoxide is, in fact, water and they were simply victims of an April Fool's joke. But that doesn't seem to be the path that was taken.
"Dihydrogen monoxide", shortened to "DHMO", is a name for water that is consistent with basic rules of chemical nomenclature, but is not among the names published by IUPAC and is almost exclusively used in humorous context.