Typically, the video game industry creates names for characters and then sticks with them throughout their lives. The only times you see changes is through localization, like when Capcom made Rockman, and he was localized elsewhere as Mega Man. It was the right call. A lesser-known localization change has to do with the beloved Nintendo character Princess Peach. Peach was her Japanese name, but when she was localized to the US, she was known as “Princess Toadstool” for a time, until she went back to being her original name in games like Super Smash Bros, Mario Kart, and beyond.
So, why was there a localization change at all, especially since Peach honestly was a good name for the character? In an interview with Time Extension, Leslie Swan, who used to work at Nintendo of America as a Localization Manager, revealed that the name was actually thought up by an ad agency…who didn’t talk with Nintendo of Japan during the dev process and literally “made up names” for the characters.
“Well, one thing that I thought was really funny was, in the early days, there wasn’t a lot of communication between the dev teams and what we were doing from a marketing standpoint in the United States. So on Super Mario Bros., they had outsourced the production of the manual to an ad agency. And the ad agency just kind of created names for things. And so they’re the ones who came up with Princess Toadstool as the name for Peach.”
Yep, that sounds like America for you. The irony is that the reason it was both kept and changed back was because of both Swan and Princess Peach’s creator, Shigeru Miyamoto:
“So when I went over and I was working on the localization, I would sit with Mr. Miyamoto and a translator and they would be going over the changes I had made and I would explain why I was making the changes, and one day, Mr. Miyamoto just said, ‘Is Peach a bad name?’ And I had to tell him, ‘No, but you know she is called Princess Toadstool in the US’. I remember he said, ‘Well, I really like Peach as her name’. So I came up with the idea to say, ‘Why don’t we call her Princess Peach Toadstool?’ Then we could refer to her informally as Peach.”
This is why you see her name as that in places like Super Mario 64, and eventually, for games like Princess Peach Showtime, her TRUE name was used. It worked out in the end.
Source: Time Extension