It's not clear exactly what you are trying to achieve, but you can use Postgres' built-in text searching system to exclude stopwords. For example:
CREATE FUNCTION initcap_realword(myword TEXT)
returns TEXT language SQL AS
$$
SELECT CASE WHEN length(to_tsvector(myword)) < 1
THEN myword ELSE initcap(myword) END;
$$;
You could extend that to multi-word strings with a little effort. However, knowing that macdonald should be MacDonald requires a lot more intelligence than is provided by any Postgres built-in system or extension that I know of. What you are looking at is the field of science known as Natural Language Processing, which can get very complex very quickly. But for a Postgres answer, you might combine plpython3u with spacy (
https://spacy.io/usage/spacy-101).
Cheers,
Greg