The name Ziggy Stardust has multiple possible derivations.
Ziggy rhymes with Iggy, for Iggy Pop, a musician who worked closely with Bowie as well as being a close friend of his.
It also rhymes with Twiggy, the name of a model who appeared with him on the cover of his 1973 album Pin-Ups.
In an interview with Rolling Stone, he remarked that Ziggy was “once of the few Christian names [he] could find with the letter ‘Z’.
In an interview with Q, Bowie stated: 
The Ziggy bit came from a tailor's that I passed on the train one day.
It had that Iggy connotation but it was a tailor's shop, and I thought, Well, this whole thing is gonna be about clothes, so it was my own little joke calling him Ziggy.
So Ziggy Stardust was a real compilation of things.

 
Stardust came from the Legendary Stardust Cowboy, the stage name of singer Norman Carl Odam.
The name Ziggy Stardust has multiple possible derivations. Ziggy rhymes with Iggy, for Iggy Pop, a musician who worked closely with Bowie as well as being a close friend of his. It also rhymes with Twiggy, the name of a model who appeared with him on the cover of his 1973 album Pin-Ups. In an interview with Rolling Stone, he remarked that Ziggy was “once of the few Christian names [he] could find with the letter ‘Z’. In an interview with Q, Bowie stated: 
The Ziggy bit came from a tailor's that I passed on the train one day. It had that Iggy connotation but it was a tailor's shop, and I thought, Well, this whole thing is gonna be about clothes, so it was my own little joke calling him Ziggy. So Ziggy Stardust was a real compilation of things.
 
Stardust came from the Legendary Stardust Cowboy, the stage name of singer Norman Carl Odam.
Ziggy Stardust (character)