Comment by nine_k
Tamagochi had a very limited way to interact with the environment, because it was an egg (tamago,卵) with a creature (chi) inside. It had needs like food and play, but could only receive care, and adjust its state a little bit.
This squid can interact with the environment in many ways, hence it can learn new stuff, and maybe do new stuff.
The name is a portmanteau of tamago (たまご, egg) and uotchi (ウオッチ, watch). The original product was even sometimes written as "tamagotch" in some media.