Names have power. This is a very old belief that is present in many, many cultures since antiquity. Bynames (also known as epithets or kennings) are some times used in ritual purposes as a means of avoiding invocations of certain deities or beings. (Not that it's terribly successful.) The time in our lives where names are usually considered the most is at our birth, when our parents name us.
Our birth names are argued by numerologists (and a few others) to shape our fledgling personalities and a measure of how our life unfurls. Names that are considered to be old fashioned are reputed to belong to people who are of a 'stuffy' nature. Names that are considered to be glamorous are reputed to lend the possessor a measure of that good fortune. Similar other folk beliefs abound.
In Wicca, many people have a public name (much like my various pseudonyms) which are used for networking and such. They have their magical name that is their call name from the gods. Some people use their magical name as their public name. I was taught not to do so because one's magical name is something sacred and not to be shared except with people whom you trust implicitly.
It was believed in the 'old days' that one's magical name could be used against them. Thus, it was taboo to speak it out loud. Also, in the 'old days' nicknames or something else of the sort were used to make it a little harder to have the names of coven members tortured out of them. Thus, if a coven comprised of people from three different villages only knew each other by these nicknames, this ensures the safety of the coven. This, however, is lore that is on shaky ground anthropologically. But that is a topic for another day.