Does google play forbid republishing an app (under the same dev account)?

My app got some bad reviews from some buggy old versions. Can I remove the app and publish it under a different package name (to get rid of the bad reviews)? Is it allowed by Google Play content policy?

yup you can do it. Many developers including me who lost their signing certificate, had to republish the app. And your case is no different from some one who lost his certificate key for exporting app to apk.