In an interview with Gene Wolfe, the interviewer asks why he dislikes inventing his own words.
LM: That kind of suggestive use for archaic or unfamiliar words is evident throughout the tetralogy. I'm sure a lot of readers had the same mistaken impression I did that you were making up these wondrous, bizarre words—especially since the use of neologisms is so common in SF. Could you talk about why you chose to use mainly "real" words rather than inventing your own?
Wolfe: I should clarify the fact that all the words I use in The Book of the New Sun are real (except for a couple of typographical errors). As you know, in most SF about unknown planets, the author is forced to invent wonders and then to name them. But that didn't seem appropriate to what I was doing here. It occurred to me when I was starting out with The Book of the New Sun that Urth already has enough wonders—if only because it has inherited the wonders of Earth (and there's the alternate possibility that Earth's wonders have descended to it from Urth). Some SF fans, who seem to be able to tolerate any amount of gibberish so long as it's invented gibberish, have found it peculiar that I would bother relying on perfectly legitimate words. My sense was that when you want to know where you're going, it helps to know where you've been and how fast you've traveled. And a great deal of this knowledge can be intuited if you know something about the words people use. I'm not a philologist, but one thing I'm certain of is that you could write an entire book on almost any word in the English language. At any rate, anyone who bothers to go to a dictionary will find I'm not inventing anything: a "fulgurator" is a holy man capable of drawing omens from flashes of lightning, an "eidolon" is an apparition or phantom, "fuligin" literally means soot colored. I also gave the people and other beings in the book real names (the only exception I can think of is the Ascian who appears in The Citadel—"Loyal to the Group of Seventeen"). "Severian," "Vodalus," and "Agilus," for example, are all ordinary, if now uncommon, names for men. And if you'd like to call your baby daughter "Valeria," "Thecla," or "Dorcas," she'll be receiving a genuine name many women in the past have had (and some in the present). As for the monsters' names, I simply named them for monsters. The original Erebus was the son of Chaos; he was the god of darkness and the husband of Nox, the goddess of night; furthermore, Mount Erebus is in Antarctica, the seat of Erebus's dark and chilly power.
Larry McAfferty interviewing Gene Wolfe
It would seem that although obscure Gene Wolfe tries to use real words and names albeit uncommon and lost words and names. He does however have exceptions such as that of the Ascian character found at the Citadel, whose name is a phrase "Loyal to the Group of Seventeen", instead of a common name.