I've tried this at times when playing ahistorically in 1.14 and 1.15, but it's very difficult to find names for many places, and I often ended up going with the name of the Indigenous people who inhabited a given tile. A lot of the cultures and chiefdoms of South America, especially, only have Spanish names today.
Sometimes there are situations where it is quite easy to give an Indigenous place name for a city, for example, the name of modern day Managua may have come from the Nahuatl Mana-ahuac, and Nahuan language speaking people had settled in Nicaragua before colonial times, therefore, if the Aztec player should found a city there, it makes sense to call it Mana-ahuac.
For Australia (I'm thinking for if Indonesia, France, or Japan, say were to settle there) there are an abundance of place names and clan names known, but giving either to a city seems kinda arbitrary. However, to me, it does seem less arbitrary than a random place name from that civilisations language of cities that already exist somewhere else irl.