Why is it called gin rummy?
The name splits neatly in two: 'rummy' says what kind of game it is, and 'gin' is a wink at the older game it improved on.
The 'rummy' part
Rummy games all share one core idea: draw a card, form melds, discard a card. Gin belongs squarely to that family, so it inherited the family surname. The difference between gin rummy and plain Rummy is mostly how you go out.
The 'gin' part
The most-repeated story is that Baker named it gin as a drink-themed follow-on to "Rum" - gin being another spirit. It's a neat, light-hearted piece of naming, and it stuck. Whether it was a deliberate joke or just a catchy label, it gave the game an identity of its own.
Who named it
Gin rummy was invented in 1909 by Elwood T. Baker, a whist teacher in New York, with his son C. Graham Baker. So unlike many card games with murky origins, gin rummy has a clear inventor - and a name to go with him.
Related questions
Where does gin rummy come from?
Gin rummy was invented in 1909 in New York City by Elwood T. Baker, a whist teacher, with help from his son C. Graham Baker. It streamlined the older Rummy family into a fast two-player game, and became a genuine craze in 1930s and 1940s Hollywood.
What is the difference between gin rummy and rummy?
The big difference is where melds go and how you win. In gin rummy you keep your melds concealed in hand and end the hand by knocking with low deadwood or going gin. In basic Rummy you lay melds face up on the table as you form them, lay off onto others, and win by being first to empty your hand.
What is going gin?
Going gin means arranging all ten of your cards into melds so you have zero deadwood. It's the best way to end a hand: you score a 25-point bonus plus your opponent's entire deadwood total, and because you have no unmatched cards, they can't lay off anything onto your melds.