The name Yamamba began as an insult. Yamamba is a Japanese ghost who makes frequent appearances in Japanese art, literature, folklore and pop culture. She's an old, unkept, mountain hag who eats children — it's not exactly a compliment. However, members of the Yamamba subculture embraced the term.
Much the way that negative words such as "Punk" and "Freak" have become embraced by youth subcultures — Yamamba just ran with it.
Yamamba were a small subculture. They numbered in the 100s of girls (in all of Japan). Despite this, they received a great deal of national and international publicity. Their style is often emulated in Europe, Asia and North America at cosplay conventions.