They are randomly-generated names from various sets of words, influenced by unique item type. Various realms have the chance to have their name generated. Each continent has chance of original realms existing at time of island creation and famous realms as potential choices. All continents also have chance of using the original and famous realms of the sunk islands, the realms existing at time those islands were sunk, and the war island realms. All existing realms have a chance of being a potential choice.
There are also famous characters that have a chance of their names being generated:
http://forum.battlemaster.org/index.php/topic,6659.0.html It's planned to sort some of them into the worlds they were most influential, famous, infamous on, but it hasn't been done yet.
There are a few silly words added, from various famous silly roleplays and long-running jokes between players through the years.
