Details are scarce concerning the origin of call signs and how the first pilots were named. Everyone has heard of the "Red Baron" of the Great War, when aviation was in its infancy. But the tradition is believed to have become popular in World War II, likely used by ground controllers to communicate with pilots, as pilot-to-pilot radio wasn't as efficient. And calling a pilot by a nickname would not give away any operational information to any enemy who was listening.
The call sign has since evolved into a tradition celebrated by each branch of the military. Pilots who "earn" their call sign take pride in a unique recognition tied to their individuality. Call signs often raise esprit de corps, distinguishing members of the group from "outsiders." Perhaps most importantly, call signs are a reminder that one's ego is checked at the door: rank, age, seniority and experience are irrelevant, everyone is a pilot. When stepping into a formation brief, all that matters is one's call sign and flight assignment.
Naming rituals vary, but three rules universally apply: (1) Pilots who do not have good names when they arrive at their first operational squadron, will be given new ones; (2) they probably will not like them; and, (3) complaining guarantees an even worse name.
The Caravan adopted a voluntary call-sign tradition upon moving to an all-formation format. No one is required to have a call sign, and many pilots choose not to ask for one. Those that ask for one - it is purely voluntary - subject themselves to nomination by their Squadron Lead, who often solicits suggestions and is responsible for presenting the candidate to fellow pilots for a call-sign award.
Unlike its military counterpart, and in keeping with the family-friendly nature of the Caravan, the ceremony is also PG-rated. In fact, numerous now-adult Caravaners proudly sport call-signs awarded through their childhood participation in all-formation mass arrivals. While we've tried to observe the traditional rules, a call sign may only be awarded and recognized upon completion of a Caravan mass arrival flight, and is typically bestowed post-arrival at a ceremony (PG-rated) on the North 40 campground.
A call-sign is intended to be unique and a reflection of the individual Caravaner who has "earned" it. Thus, leading a low-speed chase involving a white SUV - from your 201 - will get one christened "Juice." And, designing, perfecting and installing a functional, ice-powered air conditioner in your C model, well, you can see for yourself how there really was no other option besides "Puddles":