For many early Magic: The Gathering expansion sets, a name was decided on early on so that the set could be called by its name all throughout design and development. As blocks got bigger and expansions started coming out two or three times after each core set, however, something needed to be done. So code names were decided on.
Starting in 1996 with the Alliances expansion being known as "Quack" after the Macintosh computer sound, every expansion was code named. Normally this would only be a production detail and would have no effect on Magic the game itself, but sure enough they started to.
You see, most expansion groups also come with group naming. Early cards were one and done, like Stronghold being known as "Rachimulot," a card from D&D Spellfire. Onslaught, Legions, and Scourge, however, were named Manny, Joe, and Jack (a.k.a. the Pep Boys). Another good example is with Zendikar, Worldwake, and Rise of the Eldrazi were known as "Live", "Long," and "Prosper," much to the delight of Star Trek fans.
Problems began to arise with 2006's Coldsnap, however. Mark Rosewater, who comes up with each name himself, had decided on "Snap," "Crackle," and "Pop" (an homage to Rice Krispies cereal) for the next three sets. The only problem was that the next real name in line was Coldsnap. Therefore, Coldsnap’s code name was actually "Splat," and with "Snap" coming up next (that would be Time Spiral, by the way). There was suddenly much inter-office turmoil over "Splat", Coldsnap, and "Snap" all being used at the same time.
“We were considering Time Spiral as a real set name at that point, but hadn't gotten it approved yet,” said Devin Low of Magic R&D. “So half the time somebody asked "Can you send me your 'Snap' notes?" you'd have to ask 'Time Snap or Coldsnap?' It was actually pretty annoying.”
A few more close calls on chaos, such as "Salad" and "Cookies" blocks needing to be cancelled and ruining naming conventions and planning for a bit caused Rosewater to do a straight A-to-Z naming approach in 2017, with sports being the running theme for now and into the near future. As of February 2020, they have only reached "Judo" in terms of planning.
While a bit wacky at times (and despite a few screw-ups), Magic set code names perform a surprisingly important role in keeping final names away from development and allowing for more creative choices. Well, that plus having everyone guessing what the "Ice Skating" expansion could possibly be.
Of course, we have a guess.