PHIG came about as somewhat of a joke; prior to that the stone was most commonly referred to as a Chinese 12K (that is probably what it's still most commonly referred to as).
A former member here was making a big deal about it - since it's a natural stone there is no way to say that a natural stone is a 12k, and that they vary from stone to stone.
Dylan (holli4pirating) came up with the term People's Hone of Indeterminate Grit (PHIG) as a light-hearted response to that; the name just stuck.