I remember a post a while ago about the name foxfire, with lots of different theories coming up, such as the film firefox etc.
Just found this link on foxfire, a type of bioluminescence that ive never heard of before. Maybe thats what they were thinking about when naming it. sounds a bit more logical to me.
Foxfire is the term for the bioluminescence created in the right conditions by a few species of fungi that decay wood. The luminescence is often attributed to members of the genus Armillaria, the Honey mushroom, though others are reported, and as many as 40 individual species have been identified. On the suggestion of Benjamin Franklin it was used for light in the Turtle, an early submarine. In the novel The Adventures of Huckleberry Finn by Mark Twain, the characters of Huckleberry Finn and Tom Sawyer use foxfire as a source of light in order to dig a tunnel.