The short answer is we don’t know. The longer answer is we don’t know for sure, but people have suggested a number of possibilities.
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The Romans called the town Londinium, and this was passed down to the Saxons as Lundenwic, but the precise origins of the name are unclear.
Geoffrey of Monmouth, a 12th-century author, attributed the founding of London to the mythical King Lud, hence ‘Kaerlud’ (or ‘the fortress of Lud’), while later writers suggested the presence of a Celtic war-leader by the name of ‘Londinos’. Neither suggestion has gained wide acceptance.
It may alternatively represent a (Latin) corruption of a named British settlement existing on the banks of the Thames, or it may have derived from a native term for a particular geographical feature, such as represented today by the Welsh for a lake or pond (llyn) or the Cornish for water (lyn).