Accordign to Egan Loo, the name actually came from an early story treatment for Macross where the heroes' fighting machines were ostrich-legged 'mechs called "GA-WALKs" (Loo thinks the name came from a Japanese mispronounciation of the words "we walk"). The original sponsors, still lookign for the next Gundam, were not impressed, and the idea was shelved in favor of the more humanoid, more Gundam-like robots of the "breast fighters" and Valkyries. When Takatoku toys sent a test model of a Valk toy to Kawamori, the ratchets on the legs failed, swinging them down into an approximation of the proposed GA-WALK. Kawamori then put the GA-WALK mode into Macross as the GERWALK.
Hope this helps
*ahem*
Let me just say this:
GERWALK is easily my favorite mode, and if it's presence is due solely to a defective toy prototype, then I love Takatoku.