I had this issue last week.
Etsy suggests that we contact the seller to tell us their address using the Latin alphabet (no characters btw) - I find this totally un acceptable, so I proposed that when users from Japan, Israel, Russia, Greece (to name some) sign up to Etsy, they are prompted to also include their details in the most common version (Latin).
Of course - no response whatsoever from Etsy on this.
So, I went to google and translated the address. The envelope was in Japanese, the custom order was English.
Do I know if the address was translated correctly? no way, but all I know is that as soon it gets to Japan, they will understand the where it needs to go.
The postal service only needs the City or Town in English (assuming we are talking about shipping form the USA), so they know were to send it from let's say NY in the US to TOKYO in Japan.
Once is there I am sure no body reads the English version anyway.
The bottom line is that Etsy should / needs to come up with a better solution other than sellers having to chase customers to translate their address.
My two cents