Fandango, besides being a type of dance, can also mean a rowdy party, a fuss or a noisy quarrel.
When Paladin first meets him, Bobby Olsen tells of his plan to go to a carnival in a nearby town to buy all the ice cream and cotton candy he can eat. This episode takes place in 1876, and while ice cream was in existence, the machine-spun sugar confection eventually know as cotton candy wasn't invented until 1897. It first became popular at the 1904 World's Fair in St, Louis, where it was sold as "fairy floss." The name "cotton candy" didn't come into use until 1921.
Per the title, Fandango is a style of folk and flamenco music and dance.
The sheriff appears to address Paladin as "Bob", which is perhaps the only reference to Paladin's name in the whole series.