Given that the Battle of Stalingrad is often considered to be Russia's finest hour, why did they change the name of the city?

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Stalingrad's name was changed due to a policy of 'destalinization' enacted by Khrushchev in the aftermath of his (Stalin's) death and Khrushchev's assumption of power as premier in 1961. Wanting to distance the soviet union from its past under the terror campaigns and iron fist policies of the NKVD and political establishment that resulted in the deaths of millions (e.g. Holodomor, Great Purge, Gulags, SMERSH, etc.). Khrushchev himself was a commander at Stalingrad for the Stalingrad Front alongside Yeremenko and Chuikov - commander of the 62nd army. The city's name changed primarily under Khrushchev's desire to eliminate the veritable 'cult of personality' that had formed around Stalin - even if the measure was controversial, given the heroism of the city during the battle in 1942/43.

During 9 days of the year the cities name changes back to Stalingrad to commemorate its status of Hero City, this measure went in to effect in 2013 in celebration of its achievements. So It still does try to honor its past, although with the massive monument on top of the old Tartar burial ground of Mamaev Kurgan - a high point over looking the city that was one of the major points of contention during the fight for the city - it's rather difficult to forget or overlook what horrible and heroic events that transpired there so many years ago