Named after the British Royal Family. That's why it's refered to as 'The Royal City'.
Guelph's founder, John Galt, operated on the principle that towns could be used to stimulate general settlement. "The first effectual step in colonization," he wrote, "is to plant a village." In his scheme, Guelph was to be an "instant" town, designed to attract migrants to it and to the surrounding countryside. He chose the name "Guelph" because it was one of the family names of the British royal family, hence the current use of the term - "The Royal City".
You could stop by the site, which is hosted by the University of Guelph.
Also, I asked the professor that is in charge of the site about this.. and he said:
The British royal family at the time of the city's founding was of the Hanoverian dynasty, originally from Germany, members of the German branch of the Welfs; those in Italy were known as Guelphs, in opposition to the