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Why are Catholic Churches named after saints?
In one sense, this is a rather easy question to answer. In another sense, it is very difficult to answer.
The simple answer would be that this tradition started by the fact that churches in the Early Church that were erected over the tombs of particular saints and were naturally dedicated to their memory; by extension churches that possessed the body of a particular saint under the high altar were likewise dedicated to their memory. The problem though is that there is a lack of Early Church documentation on this subject matter due to the persecutions the Early Church faced in the first centuries of her existence.
It is not strange, however, that owing to the persecutions of the first three centuries, references to the dedication of churches are extremely rare. The first authentic accounts of this kind are furnished by Eusebius (Church History X.3-4; De Vitâ Const., IV, xliii, in P.G., XX), and Sozomen (Church History II.26) in regard to the cathedral of Tyre (314) and Constantine's church at Jerusalem. The well-known historical document entitled "Peregrinatio Silviæ" (Etheria) has a full description of the celebration of the dedicatory festival of the church of Jerusalem as it was witnessed by our pilgrim-authoress in the fourth century (cf. Cabrol, Livre de la prière antique, p. 311).
In the beginning the dedication ceremony was very simple. A letter of Pope Vigilius to the Bishop of Bracara (538) states: "Consecrationem cujuslibet ecclesiæ, in quâ non ponuntur sanctuaria (reliquiæ) celebritatem tantum scimus esse missarum" (We know that the consecration of any church in which shrines (relics) are not placed consists merely in the celebrations of Masses). That the primitive ceremonial consisted mainly in the celebration of Mass, where there were no relics, is also shown from the old "Ordines Romani" (cf. Mabillon, "Museum Italicum", II in P.L. LXXVIII, 857). Where relics were used the ceremony of translating and depositing them under the altar formed a notable feature of the dedication rite (cf. "Ordo of St. Amand" in Duchesne, "Christian Worship", London, 1903, Appendix; "Ordo of Verona" in Bianchini, ed., "Lib. Pont.", III). The first complete formulary is found in the Gelasian Sacramentary (in P.L., LXXIV), which embodies the Roman liturgical usages of the seventh century. Here the rite consists of prayers, sprinklings with holy water, and blessings. So quickly, however, was this ritual elaborated that in the ninth century it attained the completeness which it enjoys at the present time (cf. the eighth- century "Liber Sacramentorum" in P.L., LXXVIII; "Ordines Romani", ed. Martène, "De Ant. Eccl. Rit.", III; Daniel, "Cod. Lit.", I). The modern dedicatory ceremonial assumes two forms according as a church is simply blessed or solemnly consecrated. In the former case the function consists of prayers, sprinklings of holy water, and Mass (cf. Roman Ritual; Schulte, "Benedicenda", p. 155, etc.). - Dedication (Catholic Encyclopedia)
It simply makes sense that early churches were named after the saints or some sacred mystery due to the historical circumstances of a particular location.
To show more clearly my point I would like to limit myself to the dedications that the Church celebrates in various locations in the Early Church.
On 13 September 335 the Church of the Holy Sepulchre was dedicated by Bishop of Jerusalem. Named the Church of the Holy Sepulchre because it is believed that it was the burial location of Our Lord, Jesus Christ.
Another example is the Basilica of St Mary Major:
The Dedication of the Basilica of St Mary Major (In Dedicatione basilicae S. Mariae)[2] is a feast day in the General Roman Calendar, optionally celebrated annually on 5 August with the rank of memorial.
In earlier editions of the General Roman Calendar, down to that of 1960, it is called the Dedication of the Basilica of St Mary of the Snows (In Dedicatione basilicae S. Mariae ad Nives), a reference to the legendary story about the foundation of the basilica. For the same reason the feast is also known popularly as Our Lady of the Snows. The reference to the legend was removed in the 1969 revision of the General Roman Calendar.
The Confessio, or reliquary crypt, which lies before the main altar of Santa Maria Maggiore, is the home of the relics of the Holy Crib of the Infant Jesus.
The Dedication of the Basilica of St. John Lateran is celebrated on November 9th. However it was originally dedicated to Christ the Savior (Christo Salvatori) in 324 by Pope Sylvester I.
The Cathedral of the Most Holy Savior and of Saints John the Baptist and John the Evangelist in the Lateran, also known as the Papal Archbasilica of Saint John [in] Lateran, Saint John Lateran, or the Lateran Basilica, is the cathedral church of the Diocese of Rome in the city of Rome, and serves as the seat of the bishop of Rome, the pope. The archbasilica lies outside of Vatican City proper, which is located approximately 4 kilometres (2.5 mi) to the northwest. Nevertheless, as properties of the Holy See, the archbasilica and its adjoining edifices enjoy an extraterritorial status from Italy, pursuant to the terms of the Lateran Treaty of 1929.
The church is the oldest and highest ranking of the four major papal basilicas as well as one of the Seven Pilgrim Churches of Rome, holding the unique title of "archbasilica". Originally founded in 324, it is the oldest public church in the city of Rome, and the oldest basilica of the Western world. It houses the cathedra of the Roman bishop, and has the title of ecumenical mother church of the Roman Catholic faithful. The building deteriorated during the Middle Ages and was badly damaged by two fires in the 14th century. It was rebuilt in the late 16th century during the reign of Pope Sixtus V. The new structure's interior was renovated in the late 17th century, and its façade was completed in 1735 under Pope Clement XII.
Pope Sylvester I presided over the official dedication of the archbasilica and the adjacent Lateran Palace in 324, changing the name from Domus Fausta to Domus Dei ("House of God"), with a dedication to Christ the Savior (Christo Salvatori).
When a cathedra became a symbol of episcopal authority, the papal cathedra was placed in its interior, rendering it the cathedral of the Pope as Bishop of Rome.
When Gregory the Great sent the Gregorian mission to England under Augustine of Canterbury, some original churches in Canterbury took the Roman plan as a model, dedicating a church both to Christ as well as one to Saint Paul, outside the walls of the city. The church name "Christ Church", so common for churches around the world today in Anglophone Anglican contexts, originally came from this Roman church, central to pre-medieval Christian identity.
As for the relics of the saints properly speaking, we celebrate the Dedication of the Basilicas of the Apostles Peter and Paul on November 18th each year. Under the Basilica of St. Peter can be found the confessio or relics of the Apostle St. Peter.
The relics of St. Paul were found in the Basilica of St. Paul Outside the Walls (Basilica Papale di San Paolo fuori le Mura).
Saint Cecilia (200-235), the patron saint of music and an uncorrupted body, is in the Church of Santa Cecilia in Trastevere in Rome.
Thus we can see a direct correlation to the naming of churches since time immemorial to the location of where saints were buried or martyred or in correlation to some sacred mystery or event in the history of our salvation. Thus a tradition was born. The number of churches dedicated to saints nowadays far surpasses the number of saints so it is now traditional to name churches after a saint, regardless of who’s relics are preserved within the church in question.
Beside all these points that I have pointed out, with so many churches in some cities, we need to be able to distinguish the location of one Catholic Church from another one in the same city. Naming churches after saints really helps out. Rome itself has over 900 Catholic churches.