Emacs originally was an acronym for Editor MACroS. RMS says he "picked the name `Emacs' because `E' was not in use as an abbreviation on ITS at the time.". The first Emacs was a set of macros written in 1976 at MIT by RMS for the editor TECO (Text Editor and COrrector (originally Tape Editor and COrrector)) under ITS on a PDP-10. RMS had already extended TECO with a "real-time" full screen mode with active keys. Emacs was started by Guy Steele <email@example.com> as a project to unify the many divergent TECO command sets and keybindings at MIT.
Many people have told me that TECO code looks a lot like line noise. See alt.lang.teco if you are interested. I think someone has written a TECO implementation in Emacs Lisp. It would be an interesting project to run the original TECO Emacs inside of GNU Emacs.