Where do place names come from?
From the languages spoken by whoever named them, layered on top of each other over centuries — which is why a single map can contain Celtic, Latin, Old English, Norse, Norman French and modern coinages within a few miles.
The recurring categories:
Topography. Overwhelmingly the largest group. Hills, valleys, fords, marshes, woods and river bends. A great many names simply describe what was there.
Water. River names are the oldest surviving words in most landscapes, frequently pre-dating every subsequent language — incomers adopted the existing name rather than renaming, which is why so many British rivers derive from Celtic or older roots simply meaning "river" or "water".
Settlement type, from the language of the settlers.
Ownership, where a personal name attaches to a place — a farm or estate named for whoever held it.
Function — market, mill, ferry, salt, church.
Direction and relation, describing a place relative to another.
The layering, which is what makes place names informative. In Britain: Celtic river names; Roman -chester, -caster and -cester from castrum, a fort; Old English -ton (farmstead), -ham (homestead), -ley (clearing), -field, -worth; Norse -by (settlement), -thorpe (outlying farm), -thwaite (clearing), -beck, -fell, -dale; and Norman French additions.
The distribution of Norse elements maps where Scandinavian settlement actually was, which is a genuine historical source rather than a curiosity.
The traps:
Folk etymology, where a name is reinterpreted to make sense in a later language, and the "obvious" explanation is usually the wrong one.
Tautological names, where each wave translated the previous one — producing places whose name means "hill hill hill" in three languages stacked up.
Spelling drift, where centuries of clerks recorded what they heard.
Transplanted names, carried by settlers to other continents.
Colonial renaming, which erased existing names — and the restoration of indigenous names is now a significant process in several countries.
Early records matter most, since the oldest attested spelling is far more informative than the modern one.