file1
------
one|xxxx|111111NEW YORK|abcd
two|yyy|TEXAS 222222TEXASTEXAS|defg
three|zzzz|CALIFORNIA TEXAS TEXAS 3333 CALIFORNIA|defg
four|kkkk|DALLAS DALLAS|defg
 
file2
-----
NEW YORK,NY
CALIFORNIA,CA
TEXAS,TX

 
one|xxxx|111111NEW YORK|abcd|NY|2|N (NEY YORK matched but present only once so not replacing. Also as match found exit from loop and no need to search and replace)
two|yyy|TEXAS 222222TXTX|defg|TX|2|Y (TEXAS present more than once and replacing from 2nd occurence and leaving the first occurence) 
three|zzzz|CALIFORNIA TEXAS TEXAS 3333 CA|defg|CA|2|Y ( only replaced the 2nd occurence of CALIFORNIA. TEXAS not replaced because if any match already done(CALIFORNIA) then no need to replace rest of matches so exit from loop.
four|kkkk|DALLAS DALLAS|defg| |2|N (no match so not replaced any thing)

echo "Replace the string matches only once or except FIRST occurence replace ALL." >>$LOG
tot_cnt=`wc -l < $REP_FILE_PATH/$REP_FILE`
del_tmp_files
 
while IFS='' read -r line; do (to preserve leading and trailing spacees used IFS='' read -r )
i=0
while read rep_line; do
field[1]=`cut -d',' -f1 <<<"$line"`
field[2]="`cut -d',' -f2 <<<"$line"`
cnt=`echo -n "$line" | grep -o "${field[1]}" | wc -l`
if [[ "$cnt" -eq 1 ]] ; then
sed -e "s/$/|"${field[2]}"|2|N/" <<<"$line" >> tmp.txt'
break
fi
if [[ "$cnt" -gt 1 ]] ; then
sed -e "s/"${field[1]}"/"${field[2]}"/2g" -e "s/$/|"${field[2]}"|2|Y/" <<<"$line" >> tmp.txt
break
fi
let i++
if [[ "$cnt" -eq 0 && "$tot_cnt" -eq $i ]] ; then
sed -e "s/$/|" "|2|N/" <<<"$line" >> tmp.txt
fi
done < file2.txt
done< file1.txt