I was a little disappointed when I read that Gundobad was a king of the Burgundians in early medieval France/late antique Gaul.
I had always admired J.R.R. Tolkein's creation of names, languages, cultures and histories. I thought he had baked all of his character and place names, using his linguistic rule building blocks, absolutely from scratch. But did he also swipe names in whole cloth from his broad and deep study of medieval European history and literature?
YES! Whether or not Tolkein was directly inspired for the name of Mount Gundabad by his familiarity with Gundobad, King of the Burgundians- I'm sure SOME of the names in Middle Earth are harvested directly from our Earth's history.
I've seen this in plenty of other fantasy writing over the years and now that I've thought about it a bit I'm OK with stealing the names of obscure historical figures.
George R.R. Martin goes for a different approach when he gives characters names like Jon Snow. If I were writing a fantasy story set in a fantasy world, I wouldn't mind naming someone Snow, Fire, Wind, Hail, Mountain, Stone. The reader of the story can imagine an elemental, natural name from this fantasy world, culture, and language being translated exactly into English for her or him to read. I have more of a problem with naming someone "Jon". To me, that breaks the spell of a story set in a distant, exotic, or mythic past or other world and leaves the undertone of a common modern English name. You also get a Judeo-Christian resonance from a name which ultimately derives from the Hebrew Yohanan "Graced by Yah".
I usually love the names in Fritz Leiber's Fafhrd and Grey Mouser stories because they are so evocative and (except when set in our world's Helenistic Tyre) they don't break the spell of being set in a Newhon which isn't Earth. However, there is an evil wizard in the Fritz Leiber novella, "Ill-Met in Lankhmar", named Hristomilo. I used to think that was a perfectly evocative, puncture-proof name until I found out Hristomil (minus Leiber's added "o") actually means "Man who loves Christ" in Bulgarian, and there are plenty of people on Facebook and LinkedIn, for example, who have this name and are experts in European Community import/export regulations.
There are other writers who take the hardcore route of making up completely alien-sounding names without any particular linguistic system. I really like the results Professor John Eric Holmes used to create flavor in the Holmes Basic D&D materials and his books. Try the Holmesian name generator at the link. Many, many other people don't produce such happy results for fantasy. There seem to be a lot of X's and Z's. Names like Myxlplx seem to work better for science fiction. Often the names don't seem like the internally-consistent creations of a plausible fictional culture, but stink of an individual's over-random creative flatulence.
If you're not going to mine history for obscure names, it's hard to drive only on fumes. A source of fuel from cheating? IKEA. You could go to ikea.com but if you live near a physical Ikea store, you might have fun actually visiting it: walking around, getting Swedish meatballs and Daim candy, and being inspired by all the product names.
For me, IKEA names usually smack of the exotic and just plain weird. Maybe you know Swedish or you want to write a vaguely Viking adventure, so it would work for you in these circumstances. In any case, how can you not be prodded by names like Runen, Hemnes, Rissna, Vejmon, Kragsta, Rekarne, Anvanbar, Blaska? On the box, "Sniglar" is an IKEA series of children's furniture. But what could "The Sniglar" be in a fairy-tale setting? A tomte-like figure in a farmstead? A troll-like thing that oozes out from under the basement stairs? In a different setting, could The Sniglar be a streetwise Artful Dodger figure who knows the last whereabouts of the Forbidden Scroll and can find it for the main character... for a price?
