While reading rec.games.roguelike.development  one day, I chanced upon a
discussion about creating random names using Markov chains. It sounded fun, so
I ran off and wrote a script to do just this.

MathWorld explains Markov chains much better than I can.

Now, take a deep breath and picture Revelations (from the Bible) and Alice in
Wonderland, sitting side-by-side... I kid you not.

Imagine you start reading words out of Alice and Revelations at the same time,
but only writing down the words from Alice. When you hit two consecutive words
which are the same in each text (e.g. "at the"), you swap and start writing
down the words from Revelations. Continuing, every time you reach a few words
which appear in the opposite text, you jump to that place and keep going from
there.

That's a vague description of how the algorithm works. In effect, it basically
jumbles up a set of things to produce a new set of things. The natty thing is,
that it has an amazing tendancy to preserve much of the meaning and style of
the input.

Somebody has already done all of this. You can find the Alice books, and the
books of Genesis and Revelation, among other gems, at the Fun With Markov
Chains page.

You can apply the same method to strings of characters as easily as sentences
of words. In this way, you can provide an input set of the kind of names you
want, and the script will come up with new ones which mimic the style of the
ones you gave it.

Why?

What's the point of all this? Well, if you're an author, role player or
computer game designer, you might already understand the use of such a thing.
When creating fictitious characters, often the author wants an original name
with a particular style. This script makes that job a lot easier.

Why would you need to jumble your names if you already have a set in the style
you want? That's a tougher question to answer, but consider that your output
set is always a lot bigger than your input set (due to the enormous number of
ways to combine bits and pieces of the input). So maybe you just need more, or
maybe you're not happy with the ones you thought up, or maybe you're just stuck
in a derivative rut (so let the computer be derivative!).