Shader is a good name, because it implies what one of the main purposes of the code is: to apply lighting (shading) to the stuff.

How do you shade a vertex? Read about Gouraud shading. The idea is to do the expensive lighting calculation only at the vertices, and interpolate in-between. The "vertex shader" would calculate the shading at the vertices.

Obviously, you can use a vertex shader to do things other than shading, but "shader" is just a name, not a definition of all things this program can do.