From Wikipedia August 4, 2009:

Origin of the name

The word Moodle is actually an acronym for Modular Object-Oriented Dynamic Learning Environment, although originally the M stood for "Martin's", named after Martin Dougiamas, the original developer. [7]

Moodle can also be considered a verb, which describes the improvisational process of doing things as it occurs to you to do them, an enjoyable tinkering that often leads to insight and creativity. As such it applies both to the way Moodle was developed, and to the way a student or teacher might approach studying or teaching an online course.