It's literally just Typhoon + Explosion. It doesn't relate to the animal at all, and it doesn't even make sense; typhoons are made of water, and explosions are not fire (if they were, Explosion would be a Fire type move). By this logic, Typhlosion should be a Water/Normal type.

There was no logic behind this name; they just took two words that sounded cool, and mixed them together. I love the little yellow human, but his name just reeks of "XTREME 90s" shit.