Firstly I need character names that fit the time period and geographic location. So no obviously Irish or Scottish or European names for English characters, for instance, and certainly no modern, or even modern-sounding names. Though you'd be surprised how some names that sound very modern have been around for centuries. But that's a blog for another time.
Next I need the names to fit the characters in my head. There is no hard and fast rule for this — not even any logic at times. If a name is too strongly associated with a person I know — or worse, some little ratbag I once taught — I can't use it. Interference would happen.
The thing is, the character's name needs to evoke the character lurking in my mind — even before I start writing. I have been known to change a character's name half way through a book, when the character isn't working for me. I did that with Tallie's Knight — she was originally Serena, but Serena was quite self-possessed and maybe a bit too perfect and I didn't much like her. I ditched Serena, dug around in some Greek myths, chose one of the Muses — Thalia — to name my heroine — they did that a lot in those days. Poor girl what a name to be saddled with! And my heroine sprang to life as Tallie, young, warm-hearted, impulsive and the book was off and running.
The sound of a name is also important. Repetitious sounds can lead to confusing characters, so I try not to start character names with the same letter or sound. Even the echo of a similar sound can do it — I'm currently writing a novella with two sisters, Sally and Josie, and I found I was getting them mixed up, so Josie became Juliet and now there's no confusing them.
Titles and surnames are pretty important too. Georgette Heyer used the names of villages, towns, rivers and so on for some of her names and titles. The heroine of The Grand Sophy is named after the village of Stanton Lacy, for instance, and it's fun spotting her character names on the map. I have used that technique often — though it's important to check that real living lord and ladies don't have that title, for titles were generally attached to land. (click on the map to enlarge it.)
So I choose some possibilities and then google them. I also check The Peerage surname index, and have sometimes found that my chosen title, while it did exist at some point, had been abeyance for many years. So I feel free to use it.
I wasn't always so careful though. In my second book (Tallie's Knight) which was my first with a lord, I initially called the hero Lord Carrington. My editor at the time was unamused and pithily pointed out that Lord Carrington was, at the time, the Secretary of Defence. Whoops!
I'd chosen that name quite frivolously, from a bottle of pink champagne that someone had given me, called Carrington Blush. So, sticking with the wine theme, I chose a favorite red winemaker (d'Arenberg), but added ville to the end instead of burg, and thus, my hero became Lord d'Arenville.
I made another mistake when I gave a minor character in my Marriage of Convenience series the title of the Countess of Maldon — Maldon is a pretty historic village near me. I meant to check it, but in the scramble to meet my deadline I forgot, and whoops, the Baron Burnett of Maldon has been the Lord Chief Justice of England and Wales since 2017. Which isn't quite the same as an earldom, but still. And now that girl is the heroine of a half-finished novella. I hope the Lord Chief Justice doesn't mind too much. I doubt he reads regency romance anyway.
I rarely have real historical characters in my novels, but I do occasionally name a minor character after someone I know — as long as their name fits the time period and geography. So my friend Trish Morey became the Countess of Morey and her four beautiful daughters got a mention. I dedicated my latest book, The Scoundrel's Daughter, to my friend Alison, and gave a very brief walk-on part to her and her husband, as Sir Alan and Lady Reynolds. It had a side benefit in that it made the real Alan curious enough to read the book. These "real" name characters rarely do anything — not even speak in the book, as I don't like mixing my own reality with my fiction. It's just that I need a name, and . . . why not?
Servants, if they're not simply a function such as "a footman carried her bag upstairs" generally need plain common names, so I've had a Polly, a Betty, a Clara and so on, or I use their surnames, as was common at the time. I did have fun with a butler who I called Hewitt Featherby — which was the actual name of an ancestor of a friend of mine, and it was so glorious I couldn't resist. Butlers can be fun. Featherby was in my Chance Sisters series and he replaced Lady Beatrice's ghastly previous butler who I called Caudle. Because I could.
So that's it, my not terribly scientific method of naming characters. I hope it's been helpful or illuminating. Anything surprise you about it? Feel free to comment.