The europeans referred to china as the far east.
the chinese referred to china as the middle
kingdom. what do these terms illustrate?
(1) the names of places refer to significant
physical features.
(2) most people do not understand geography.
(3) the point of view of people influences
geographic labels.
(4) place names sometimes commemorate
important events.

This is an excellent question! It very clearly shows how (3) The point of view of people influences geographic labels. 

There is no doubt about it that it makes no sense for the Chinese to name themselves the Far East, as it doesn't make sense for Europeans to name them the Middle kingdom. It only shows how our point of view relates to geographic labels as well.