Sometimes words or names will just pop into my head (E’Jaaz, Torn Moon) but more often than not there’s no mystery to the process.
I like to use several of these techniques:
I’ll pick a name that suits the character’s personality or traits ie. Nibbler for the dragon because he’s always hungry and likes to chomp and nibble on food (nom-nom*), Lady Narcissa because she’s narcissistic etc
I’ll use phonetically similar names for races (the way a names sounds) ie. Lentol, Kelko, Stoddit, Dridif for some of the Tremen – these are names generated through playing around with noises/sounds
I’ll look to names that I’ve come across in my travels and change them slightly to better match my character ie. Marsila
Sometimes I’ll base characters on sayings – Stix and Stones aka the Delightful Brothers, came about from ye olde saying sticks and stones may break my bones…
Or I’ll be really lazy and simply leaf through a Name Dictionary until I stumble across a name that I like and think would suit my character ie. Azariah