From History of Firefox: The project which became Firefox started as an experimental branch of the Mozilla Suite called m/b (or mozilla/browser). read more
Continuing pressure from the Firebird community forced another change, and on February 9, 2004 the project was renamed Mozilla Firefox (or Firefox for short). The name "Firefox" (a reference to the red panda) was chosen for its similarity to "Firebird", but also for its uniqueness in the computing industry. read more
Actually, I checked it up and there really is an animal called a firefox. However, its official name is red panda, and it's only translated to "firefox" from its Chinese name, hunho. read more