[twic]

To expand this:

ancient times - Oxford and Cambridge universities come into being, composed of multiple independent and mostly equivalent colleges (ie all teaching the full range of subjects)

1826 - London University founded

1829 - King's College founded

1836 - London University and King's College combine to form the University of London, comprising two colleges roughly on the Oxbridge model; London University is renamed to University College

University College may be a silly name, but what else would they have called it? London College? Hardly better.

Note that University College, Oxford and University College Dublin are called that for completely different reasons.