Creepy dark dude in a dark tower in a dark land that spreads dark shadow and feeling of something ghostly or undead or just pure evil. What more ground is needed for his nickname? It's not like they called him Mr. Sunshine. It didn't even have to be Elves who named him. The name could have come from any nation/race/group. Most probably the Elves did, since they're the closest, but the basis behind the name doesn't necessarily reflect that.
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You passed from under darkened dome, you enter now the secret land. - Take me to Finrod's fabled home!... ~ Finrod: The Rock Opera
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