How to use taxonomy fields with Views and avoid duplicates?
I don't know if this will help, but it seems similar. (Drupal is still pretty confusing to me, so I am sorry if this is not helpful.)

I eliminated duplicate rows in my view by changing the filter criteria. I could filter with two different criteria and get the same view, but one view had duplicates and one didn't.

The filter criterion that gave me duplicates was "Content: Producer_category (taxonomy vocabulary 5)."  Producer_category is the name of a field. With this filter, if the content had multiple terms of the vocabulary applied, it appeared multiple times.

The filter that worked was "Content: has taxonomy term". After choosing this, I was prompted to select a vocabulary, and then to select term(s). I used the dropdown to display the terms. Also, Since I only selected one term for my display, i did NOT check "reduce duplicates", but I guess if you choose multiple terms you should.

Also, FYI, I was getting multiple errors when using Views since updating to Drupal 7, and I figure I probably did something wrong in the update process; all my Fields disappeared, among other things. So I ended up re-building the View from scratch. It seems like there are a bunch of new settings and options, and my view had some old, obsolete settings, and it just seemed better to start over and eliminate any hidden errors.

Good luck.