The city of Baldur's Gate is named after a famous explorer called Balduran. As far as I can recall from what I've read in-game, he was very rich from sailing to far-flung lands & findign lots & lots of treasure. With this money he built a wall around his home port, which eventually became to be known as Baldur's Gate.
The actual story is a bit more complicaetd than that, but I don't remember enough to tell it confidently.
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