Each and every Pokémon appears to be based off of one thing or another, in both their name and appearance, and while some are more apparent than others, none is without exception. This holds true for Milotic as well. Milotic is a little tricky to figure out at a glance so I had to do some research to figure out the inspiration behind this Pokémon.
In the case of Milotic it could be loosely based off of sirens, creatures of myth that were both dangerous and beautiful, or the Loch Ness Monster, a mythical creature said to live at the bottom of the Loch Ness in the Scottish Highlands. Its appearance, however, seems more closely based off of sea serpents or sea dragons, although it shares many physical similarities with an oarfish with its long and pale body and red dorsal fins (which I always call "ear fins"). Whatever the case, all of these sound like plausible ideas for the inspiration behind Milotic's origins in one way or another which I think is pretty cool.
As for Milotic's name it could be a combination of the words aquatic or melodic and Milo––possibly from the famous sclpture Venus de Milo, which is known as an example of beauty, and has no arms, just like Milotic, or even mitosis, the healing process of a body part, as Milotic has a lot of healing and defensive moves. Its Japanese name, Milokaross, could be a combination of Milo (Venus de Milo) and καλλονή kalloni (Greek for beauty) or Χάρις charis (Greek for beauty, elegance, charm, or grace, and is also the name of one of the minor goddesses of charm, beauty, nature, human creativity, and fertility). All of which I think fit this Pokémon perfectly.