His name was changed because he had encountered the Lord and that encounter had transformed him. He needed to be given a new name to reflect this, and only God knew what that name should be.
When you come to the Lord, you become a member of the family of God. You obtain such status: you are a child of God. We wrestle with God for salvation, for the sick, or for souls, and what blessing comes to us! Jacob knew he was dealing with but something wonderful and deep. Names have meanings. So what does God’s name mean – what is the special character of my God revealed here? The answer given by Charles Wesley in his hymn about this encounter – ‘Come, O Thou Traveller unknown’ – is love and mercy and forgiveness. From that time Jacob had a much deeper relationship with the Lord, and Esau admitted him to the land.