You can follow the discussion that came up with the name Chinchilla in the
Big Chihuahua coming topic from 2011. As you can see, I didn't originally envisage the 10-letter puzzle having its own name, but some forumites raised the idea.
The town in Queensland (population about 7000) has no relation to the animal. Its name is thought to be derived from an Aboriginal word for the cypress pine.
When planning to introduce the 7-by-many puzzle I considered possible animal names. The best I came up with was Chickadee - a word with seven different letters, starting with "chi" and designating a type of animal, a bird. But I was a bit put off by the fact that the same seven letters can make "dickhead". Also, it seemed to me that the Chinchilla name hadn't really taken hold of people's imaginations. So I went with 7-by-many, which attempts to encapsulate the concept of the puzzle.