When I name items, I think about lore, but I balance it with the items strength. For instance, if I have a favorite trainer and make a modest ring or necklace that enhances whatever stat they train in, I may name it after them (Rashonan's Blacksmithing Gloves or Faendal's Apprentice Ring). I save the heftier items to name after a daedric god or goddess.
There are times few and far between when I create an item or spell from a specific reason and name it for that reason. As a thief, I use little magic, but magic is necessary in some cases, especially in of ghosts. A strong fire spell tuned to my own abilities simply gets named 'Ghostbuster'. It goes with lore, but also has a pop culture spin on it. It is funny to see the white mages shoes in Oblivion, the icon for them looks a lot like Chucks (Converse), occasionally I'll break the mold and have a little fun. Less is more when it happens less often and is suitable.
Sticking with the lore is really a good way to go, it fits the role playing genre well.