I'm going to attempt an answer with the caveats that the materialists often find my etymological ideas on names to be poetic as opposed to scientific, and that I'd want to know what Graves thought but don't have access to his Greek Myths at the moment.
Gallifreyan posted an excellent link to a scholar who pondered this question. My take on the essay is that this interpretation is very much in question. This leads me to believe that the Wikipedia assertion is misleading in that it makes the proposed etymology "burner of ships" a definite, rather than a proposed, meaning. (i.e. no one knows for sure, which is the case with many Ancient Greek names. A strictly materialist viewpoint would hold that everyone is guessing, which is why I like to check the Graves, with the idea that his guesses could be categorized as "as good as any, better than most", per his keen poetic insight.)
The "ka" could be meaningless, and not based on the Greek work κάω (káō), but assuming it is based on that verb, I'll propose an alternate meaning:
I propose this because one of the meanings of κάω is burning in the sense of passion. Pindar uses it in this manner, speaking of Medea:
"...and a longing for Greece would lash her, her mind on fire..."
Source: Pindar, Pythian Odes, 4.219 [Greek excerpt: "ἐν φρασὶ καιομένα”]
This association does not seem to be merely poetic in that the The American Heritage Dictionary Indo-European Roots has an entry for kā-:
kā- To like, desire. Oldest form *keh2‑, colored to *kah2‑, becoming *kā‑.
This root isn't listed for Ancient Greek (although ambiguity in relation to the meaning of names is sometimes an indicator of pre-Greek origins) except loosely in the word kardia for heart. Kardia comes from a ker root (the d is eventually dropped in the Romance languages) and the AHDIR has a subsequent entry:
ker-3 Heat, fire.
Passion or desire actually makes more sense from a narrative perspective because there is an element of romance in Odysseus' interaction with Nausicaa, who would marry him if he didn't have to return to Penelope. She later marries Telemachus, Odysseus' son, and so I'd go so far as to propose her name could mean:
because ναυτικός (nautikos) "mariner, sailor, seaman" is derived from ναῦς (naûs) "ship".
Nausicaa chooses the seashore to do the washing with her handmaidens, and this is clearly not random. The beach is a decent place to watch for sails, especially in an era where it is prudent for ships to stay in sight of land. The beach is also a great place to keep watch for flotsam, such as shipwrecked sailors.
But it occurs to me this second meaning could be inverted so that Nausicaa means:
- "Desire of Sailors" / "Beacon of Sailors"
because Odysseus washes up on her beach through divine intervention, and Telemachus returns to marry her.
End Note: The wikipedia entry omits Eliot's mention of her in a famous poem, which could be taken as a corroboration of the passion/desire interpretation:
Paint me a cavernous waste shore / Cast in the unstilled Cyclades, / Paint me the bold anfractuous rocks / Faced by the snarled and yelping seas. // Display me Aeolus above / Reviewing the insurgent gales / Which tangle Ariadne’s hair / And swell with haste the perjured sails. // Morning stirs the feet and hands / (Nausicaa and Polypheme) / Gesture of orang-outang / Rises from the sheets in steam // ....