Phallic, Phallus, Om-phall-os
This is from a history book (need to find out which book), "The idea that the Sanscrit p'hala or p'hulla may in sense, as well as sound, be cognate with and' the source of the Greek phallus, derives strength from the fact that Mahadeva, in his character corresponding with that of Jupiter Marina, or Neptune, bears, like his Roman kinsman, a trident, called Triphula and sometimes Triphala, denoting trifurcation and triflorescence. Jupiter Triphylus is thus identified with the three-eyed Siva. "
The above two "om-phallos" are nothing but lingams and the presence of snake only confirms it.
My conjecture to explain why the Lingam, found in others parts, including ancient Greek, Egypt, Lydia, Babylon, Troy, etc., with same prinicple of worship and veneration, is called Om-phallos by Greeks and the adjective - phallic - in phallic worship. It is based on Ancient Greek being very close to Sanskrit. There is a rule in Sanskrit and Hindi which says when you add "ic" or "ik" (for transliteraltion does not capture the Guttral Hard Unaspirated K), it becomes like -ness, and from noun to adjective. So Mangal becomes Mangal-ik, Satva, Satva-ik, Deva, Deva-ik, Prakiti, Prakiti-ik, and so on. So Fruit Phal becomes Phal-ic. For genetive case, sometimes "ah" or "as" is also employed, besides -asya for singular, which can become "os". So phal can become phal-os. And there is some rules where 'l' can be doubled or in case of transliterations, sounds are approximated and doubled sometimes.
The world comes from Sanskrit, which Greeks also took, since they are sister languages, or Sanskrit happens to be its mother language, and they worshiped "Omphallos", which is Om-phall-os.(If you see where English is spoken with most versatile grammer and expression, then you can say the source of English must be UK, and similarly one can show Sanskrit is more versatile than ancient Greece but still very close).
Now surprisingly, in Sanskrit, the world "Phal" means Fruit, Lingam or Oblesik, and Male Generative Organ. The word "Om" is nothing but short form of "Aum", as the "A" and "U" becomes "O" in Classical Languages like Sanskrit and Greece. Have you ever wondered what the "om" in om-ni-scient, om-ni-present, and om-ni-powerful comes from? It denotes the same aspect of all Powerful God. In Hinduism, AUM or OM is the symbol for the Brahman or the Super Soul. The suffix "os" is coming from Declensions, where it could mean genitive case, and some euphonics combination rules (like in Sandhi of Sanskrit). So it means Fruit of the Supreme Soul, which is what is really the whole life here is in our forms, including the resources on earth, which ancients were taught to respect (read they anticipated the today's Global Warming, which I will talk about later). Sometimes "l" can double in classical IE Languages. Now in the word, "Phallic", it is denoting the symbol of English "ness" as an adjective, since their is a rule which says, you can add "ic" to make it and adjective.
In religion there are two parts: Esoteric meanings for the Priests and the Learned, and Exoteric meanings for the Masses and the Unlearned. Think how many people were educated in the US 100 years back, and in fact how many people are really educated even now. So you can not blame the exoteric and crude meaning being propogated and the modern society calling it a "penis worhsip" in the name of "Phallic Worship". Recent Discovery Channel made an announcement of their findings, that all of middle east had snake worships. So was Sun Worship also prevalant all over the world (Snake mounds, Lingams and AUM signs have been found in the Americas also).