Another way to give great depth to a world or setting in to simulate liguistic drift in your world. Tolkien was a master of this, and it helps you place names that maybe have some meaning.
If you first decide on a "template" of names like psuedo Celtic, Germanic or whatnot, you can shape the names.
For instance (and this example is illustrated in the book The road to Middle Earth) there is a site of an old excavated Roman villa northwest of Oxford England that stands near a village named Fawler. All that remains of the villa is the brightly colored pavement dating from the fourth century.
The village Fawler has been around for centuries, and to most people the name means nothing. But in the middle ages it was called Faulflor, in old english fag flor "the colored or painted floor".
Names can lose old meaning, get mispelled or brought down in fragments through history. Not only is this great to help you make your world feel more organic, it also helps you remember them instead of simply assigning arbrtrary names. They can also aid in plot hooks too.
