Why is dominant strategy incentive compatibility (DSIC) named the way it is? Dominant strategy incentive compatibility (DSIC) means truth-telling is the best policy, but why is DSIC named the way it is? My understanding is that the designer of the mechanism wants to incentivize truth-telling. The mechanism is DSIC if every player's dominant strategy is compatible with what the designer wants to incentivize. Is my understanding correct? Thank you in advance.

As explained here, a dominant strategy incentive compatible (DSIC) mechanism ensures that truth-telling is a weakly dominant strategy for every player. Such a mechanism is compatible with dominant strategy incentives (the personal incentive for a player to play his/her dominant strategy), as, no matter what strategy the player chooses, he/she cannot obtain an outcome better than when he/she plays truthfully, which results in the player choosing a strategy that is truthful to his/her valuation. This makes this class of mechanisms "strategy-proof".

Hope this helps.