Place names have been with us as long as we have been here. Today's English is made up of parts of dozens of other languages, some of them long dead, others changed beyond all recognition. Many languages have their roots in what modern linguists call "Proto Indo-European". It is the language of the descendants of a man named Gomer in the 3rd millennium BC. This eventually developed into language groups such as Germanic, Romance and Slavic (as well as others which did not affect us too much). Gradually these groups drew wider apart and sub-segregated into various individual languages to the extent that some are incomprehensible to others even of the same group. Even so, there are some words (and therefore place descriptions) which have transcended almost all language barriers.
In many locations, the language of a particular region has stayed the same, merely undergoing local development. In Britain, however, the island has been invaded and/or settled by the peoples of so many nations that modern English bears not the slightest resemblance to the language spoken here 3000 years ago.
The starting point in Britain is the language of the Celts. These people came here from Eastern Europe starting in the 15th century BC via the Danube and Rhine valleys initially (later from what is today the Netherlands and Belgium). Virtually nothing is known of the language within the British Isles prior to that time but a version of Gaelic (Celtic) is still spoken in the remote islands of Scotland, parts of Ireland, and as a second language (mostly for heritage reasons than practicality) parts of Wales, Cornwall and Brittany in modern day France.
The Celts gave us the names of most natural features, including our rivers. Originally, they were mostly landmarks for travelers and took on little importance in themselves until later kings started to tax their subjects in an organised manner. The Romans settled in what they called Britannia from AD43 (they had visited previously but Julius Caesar had vastly underestimated the Xenophobia of the resident British people. During their 4-century stay, their Latin did not significantly influence the place names of Britain except for their city and route names. However, many of the people they had utilised as mercenaries decided to stay and stamped upon the land the biggest linguistic influence of all time.
During the period of the Roman occupation, these soldiers married local women and settled here, raising families. They were basically a Germanic people from the area between Northern Germany and Denmark called Schleswig-Holstein who were skilled with the short sword which they called the Sæx. As a result, they were called Sæxons (they had NOT come from Saxony in modern Germany). Places named by them are mostly in the areas of the Roman occupation and highly concentrated in the south and east of England. It was only after the Romans returned between AD350 and 400 to deal with domestic problems that the land became known as the "Angle Land" (because of its shape) and the people called (by continental outsiders) as Anglisc.
Since then, English (strictly speaking it could not have been called "English" until at least the 5th century) has been influenced by the Greek of the later Celts, the Old German of the Anglo-Saxons (for simplicity, we will call them by this very modern label, even though there was actually no such race), the Norse and Danish of the Scandinavians, the Medieval French of the Plantagenets and Angevins as well as many other influences from Arabic, Spanish, and (alas) the USA.
Of course, there was no set standard for the language which varied considerably according to which part of Britain you lived in and place names suffered in the same way. One place could be called by a number of differing "labels" by the different peoples. This happened a lot in mountainous areas where we still get peaks in Cumbria, for example, known by both Celtic and Norse names according to which side of the mountain you lived. Some place names even contain elements of several languages. Typically, you could have a valley descriptively labelled by the Celts as denu but then the English, not understanding this as a description called it dale, hence Dinsdale - "valley valley". In theory, you could have ended up with Dinsdale Valley (valley, valley, valley). This certainly happened in western Cumbria where the Germanic peoples called a huge lake vasser (water) but we later peoples, in our ignorance, now call it Wast Water (water water).
Things became more standardised as kings got more greedy. All over Europe, rulers were developing a passion for vast palaces and the Church clergy had a sudden hunger for ostentatious cathedrals, and both were adamant that they were not personally going to pay for these. The burden, as always, would be placed, not on the rich rulers and religious leaders, but upon the poor. So Europe was suddenly placed under a massive tax burden and in England, this took the form of King William's Domesday Book of 1058. It was not supposed to be a helpful historic document (which it is) but a taxation catalogue, listing every acre of land and designating whom it would be who would pay the tax placed upon it, and how much that tax was to be.
The first thing the tax-collectors (shire-reeves - sheriffs) discovered was that the same place names were cropping up all over the place, making cataloguing difficult and tax-fiddling highly likely. So many places were renamed completely while others just had suffixes to distinguish one from another. Since that time, some place names have changed very little, while others bear no resemblance to the way they were then listed in 1086. However, Domesday is a fair guide to how places were spelled in 1086, although much of the work of the compilers was guesswork from residents who often could neither read nor write and who spoke a dialect which was often alien to the compilers. So, yes, a huge proportion of our historical etymology is based entirely upon educated guesses. However, as modern archeological methods reveal more and more information from the past, our guesses can increasingly be somewhat more educated.
Since 1086, many place names have remained broadly similar in spelling. But because the English language has changed considerably over that period, our genreal understanding of what the place names mean has largely been lost. Knowing what the name originally meant is enlightening as to how life was all those centuries ago. As far as understanding these meanings, I have tried, where possible, to get to the original meaning of the word.