Also on Wikipedia:
"The name of the city has its origin in that even though the town is situated in the cold north of Faerûn, the Neverwinter river that flows through it is heated by fire elementals living under the nearby Mount Hotenow in the Neverwinter Wood. The heat given off from the river creates a permanent warm climate in the immediate area; without the elementals, the river, and subsequently the city's water supply, would freeze over. An alternate loric explanation for the name is given in Neverwinter Nights 2: When the city's founder (Halueth Never) was hunted to the coast by orcs…