Pussy introduces herself, Bond says "I must be dreaming." Did he say that because he imagines she will give him a lot of sex or is he just reacting to her overtly sexual name and beauty? Or does the name insinuate her pussy is large? I never fully got the joke.
In real life, bond doesn’t ALWAYS get the girl (ie the very cold and difficult Tilly Masterson),
So, the “perfect” world of make-believe , where Bond ALWAYS fulfills his desires is likely the only place a name like “Pussy Galore” could exist, hence Bond concludes he must be dreaming.
Note: I am assuming “Pussy Galore” has the same meaning to Bond as to most men....any woman with a name like that will freely have sex with you.
And recall the 1949 movie Whiskey Galore!, based on the popular 1947 novel. I figure Fleming was thinking of it when he named her and the screenwriters must have known it as well.
When introduced to a name like that it would take a man of iron not to smirk... Bond just did one better and said what he was thinking. Much like:
Plenty O'Toole: Hi, I'm Plenty.
James Bond: But of course you are.
OR in a similar vein
Vesper Lynd: I'm the money.
James Bond: Every penny of it.