The name 'ZIP' was chosen to convey the idea of compressing files into a smaller size, making them 'zip' together for easier storage and transfer. The term suggests speed and efficiency in compressing and uncompressing files.

Like zipping something up in a bag. You unzip the bag and have all of its contents, zip it up and all of its contents are in one bag (file).

7zip has always been the defacto-best, I'm sure there's other decent compression algorithms but 7z has always taken the cake for me.