Mostly coincidence. Iberia in the case of Spain+Portugal comes from the Ebro River, while in the Caucasus it comes from a local Indo-european word "Hber".

since place names in Greek will pretty much always end in ia, the two places became known as the same.

homonym place names aren't too uncommon, a region on the Adriatic and in the caucasus were both called Albania, and a Region north of Portugal and north of Crimea are both called Galicia