For many centuries, commoners in Japan did not have family names, and so yagō would often come about to describe people by their location, occupation, or by a store or business they owned.
Houses might come to be known simply by their location, such as in a meadow (原, Hara) or at the foot of a hill (坂本, Sakamoto), and families took on these place-names.
Yagō came to be especially well-known and widely used in kabuki theater, where actors take on a name relating to their guild.
Artists, writers and poets in Japan, like in other parts of the world, would often take on pen names or pseudonyms.
More often, these art-names or pen names are called kagō (家号), or simply gō (号), in Japanese.