To clarify, a verdugo means executioner in Spanish.
In this context, it's simply a surname.
"Jose Maria Verdugo, a corporal of the San Diego company, who had served in the mission guard at San Gabriel, was grantee of one of the first land grants in California, dated October 20, 1784, and January 12, 1798." Source: California Place Names: The Origin and Etymology of Current Geographical Names, by Erwin Gustav Gudde, 1960.