It’s not your butt.
It’s actually referring to the front part of the female. :o
Yes, the “front bum”.
Maybe the same thing they think when they meet a William who goes by Willie? 
They’re not different meanings. The word has many meanings, some of which are more prevalent in either soceity. I understand both meaning of the word and use them in both contexts often.
But every time I hear an american call their ass a fanny it shits me good. No-one down hear really uses it to refer to the “female bum” down here really… except for your parents… I find it a lot easier to just say cunt.
You should only have your fanny paddled if you’re of age … and the paddling is done by a licensed professional! Or me.