Who Named the "Pals Battalion"?

Historian Peter Simkins says it was Lord Derby (Edward George Villiers Stanley, 17th Earl of Derby).

Lord Derby

One of the figures in Britain who did anticipate a long war was Field Marshal Lord Kitchener. He was appointed, somewhat against his will, Secretary of State for War at the outbreak of war. Kitchener tapped into this mixture of local civic pride, national patriotism, and a sense of belonging to a community. Once Kitchener tapped into this in end of August, beginning of September 1914, the British Army suddenly expanded almost overnight.

Now, the key to this was local effort, local civic pride and the symbol of this in 1914, was the idea of the Pals battalion. Around 26–27 August, it was announced in Liverpool that Lord Derby was going to try and raise a battalion of "Pals". By this he meant that he thought the battalion could be raised of local lads who might be willing to join the army more readily if they knew they were going to serve and eventually fight alongside their friends.

Recruiting Poster for a Footballers' Pals Battalion

This idea caught on in Liverpool and within a week or so, Liverpool had four Pals Battalions. Within a period of about three weeks, the great industrial cities and towns of the North of England were all raising units on a local level. By the end of 1914, there were well over a hundred of these Pals battalions from all sorts of places. 

His idea was a success and soon groups of men from the same workplaces, villages, churches, and even football teams were joining the army together. The men were happy to fight with people they knew, and their families were pleased. They knew the friends would be there to look after each other during the war. (PBS Interview)

Memorial on the Somme Battlefield to the Accrington Pals (11th East Lancashire Regiment)
Out of some 720 Accrington Pals who took part in the attack, 584 were killed, wounded, or missing.

By the end of September 1914, over 50 towns had formed Pals Battalions. Larger towns and cities formed several battalions each. The was a great flaw in the scheme, however, as the Accrington Pals example above shows — similar to American National Guard units, if a Pals Battalion took heavy casualties the population of local communities could be tragically decimated in one blow.