It was named after the voyage of Magellan through the Strait that now bears his name. As they were sailing at night, they could see the light of numerous fires dotting the landscape, having been lit by the Natives. Our sole source on this is a letter from Maximilianus Transylvanus to the Cardinal of Salzburg, specifically ^1 .

But one night a great number of fires were seen, mostly on their left hand, from which they guessed that they had been seen by the natives of the region.

^1 A Letter ... Concerning the Molucca Islands....

^2 Bergreen, Laurence (2003). Over the Edge of the World: Magellan's Terrifying Circumnavigation of the Globe. HarperCollins. p. 179