A demultiplexer is called a data distributor because it takes a single input and distributes that data to one of several output lines, based on the selection lines. This functionality effectively routes the input data to multiple destinations, making it a device that "distributes" data from one source to many outputs. Thus, while it has one input, it can send the data to any one of multiple outputs as controlled by the selection inputs, acting as a data distributor in digital systems.