Author L. Frank Baum stated that he named his magical kingdom “Oz” after seeing a small filing cabinet drawer marked “O-Z.”
In 1903, Baum gave his account of the creation of Oz to Publisher’s Weekly. Baum stated,
“I have a little cabinet letter file on my desk in front of me. I was thinking and wondering about a title for my story, and I had settled on ‘Wizard’ as part of it. My gaze was caught by the gilt letters on the three drawers of the cabinet. The first was A-G; the next drawer was labeled H-N; and on the last were the letters O-Z. And Oz it at once became.”
Source
O-z Spelled Lifetime Of Fantasy For L. Frank Baum (Chicago Tribune: March 29, 1985)