@satya - You can not update username on a lithium community as you don't have permission to update username. Send an email to email@example.com to update your username.
I'm not sure of the answer in this particular case as there is an important dependency that may vary from one community to another. The dependency is where the screen name is collected. If there is no SSO, then the answer provided by @TariqGrazitti is definitely correct as the only option is that the screen name is collected by Lithium. If there is SSO, however, the answer is not so clear. Many SSO communities, although taking care of initial registration on "their side," still hand the user over for screen name selection. Among the advantages is that it takes advantage of the built in smut and screen name filters that Lithium provides as part of this process. In that case, the answer is again correct, and the Lithum team can change the name. However, some Lithium customers, as part of their SSO integration, also collect screen name, and then send it over as part of the encrypted SSO token. In that case, Lithium cannot change it, as it will be overwritten the next time the user signs in. Instead, in can only be changed on the customer side, so the new name is sent in the token.
We needed to change a couple of community members users names that were derogatory. After doing some investigative work in Admin, I figured out how to change the names by going to Admin>Mod Tools>Edit Users>Find Your by User Name>Change Name.
I hope this helps the next person who's looking for this information.
Just remember that this only works if the user name is selected on the Lithium side. If you have SSO and user name selection is completed in the company registration and passed to Lithium, your method will not work. Any changes will be overridden the next time the user logs in.