Schulz had originally published his comic once a week in the St. Paul Pioneer Press under the name "Li'l Folks". Unfortunately, this title was quickly axed once his submitted his work for national syndication, much to his chagrin ("Good grief!"). The United Feature Syndicate was intent on changing the strip's name to "Peanuts" because "Li'l Folks" could be likened to two other preexisting comics: "Li'l Abner" and "Little Folks". This new moniker was gleaned from a fairly random source, the Peanut Gallery on the Howdy Doody TV show. In regards to the strip's amended title, Schulz said, "It's totally ridiculous, has no meaning, is simply confusing — and has no dignity. I think my humor has dignity." In an attempt to undermine "the worst title ever thought of for a comic strip", Schulz would later run the comic under the name "Peanuts, featuring Good Ol' Charlie Brown" from November 1966 until January 1987.
Sources: (1, 2)
19 Totally Mind-Blowing Facts