Source : Free On-Line Dictionary of Computing

README file
     
         An introduction traditionally included in the
        top-level directory of a {Unix} {source} distribution,
        containing a pointer to more detailed documentation, credits,
        miscellaneous revision history, notes, etc.  The file may be
        named README, or READ.ME, or rarely ReadMe or readme.txt or
        some other variant.
     
        In the {Macintosh} and {IBM PC} worlds, software is not
        usually distributed in source form, and the README is more
        likely to contain user-oriented material like last-minute
        documentation changes, error workarounds, and restrictions.
     
        The README convention probably follows the famous scene in
        Lewis Carroll's "Alice's Adventures In Wonderland" in which
        Alice confronts magic munchies labelled "Eat Me" and "Drink
        Me".
     
        [{Jargon File}]
     
        (1995-02-28)