I approach place naming from two different sides depending on mood.
In the first approach, I make a name by english meaning: Farm Village, for example, might become Farmville (no connection to the game of the same name) which I would then use as a basis for shaping elements out of my conlang of choice. In this case, I look at "farm" and "city", which are kangre and rishé, and looking at the combinations I can form from that, I settle on Karishé as the name for a city which roughly means "farm-town", referencing the fact that, when it was founded, it was a farming community.
In the second, I find a name I like and modify it to fit my world. For example, in my early days, a number of my names were rather uninspired: I had a pair of ports named Olympia (at the base of the Olympia mountain range) and Camelot (a city built into a cliff peninsula). Looking at my language, I said "Surely I can take these obviously uninspired names and come up with something which maintains the rhythmic feel, but is my own." Thus I looked at my language for elements which might fit. Olympia led me to orind (gold) and c'honthia (sea-port), which led naturally into becoming the Port of Gold, or Orinthia. For Camelot, I followed the path of describing it by name: the City of Carved Stone, which produced Kamelon, from kangré (city), nimelorm (to carve), and noc (rock, stone).
Occasionally I follow a third path: Make a name which sounds good and then reverse etymologize it either by finding suitable roots or by making them, if none can be found. For example, on my Map of Atrusia (in the Region/World forum), many of the names are made following this path, with only a small thought being given to meaning. The exceptions are on the eastern side -- the cities in the mountains are dwarvish and follow particular naming procedure based on two elements: the name are meant to sound vaguely Japanese, and to share common elements. For example, Medrídana holds an element I know to mean "valley", but doesn't have a full etymology. Likewise, both Ijíamo and Kenjíamo share the element iamo for mountain (in both cases, the í comes from being a double-i in my dwarf language; iciiamo and kenjiiamo) while Saroda and Aci Kiyoda share the element da for "a fortress or capital city", while Aci Kiyoda in particular means "New Seat of the Crown" (kiyo being the crown's seat and da being a capital), and is derived from "kyôto", the old imperial seat of Japan (I mentioned elsewhere, my dwarves do have a japanese style of culture, and this is shared in the design of their language).