@StrangeMwarn: Yes, I suppose the name could be quite misleading. XD
It's one of those terms that's a perfect example of how words morph and change over time. Creepypasta is a play on the term Copypasta which is a word play on Copy/Paste. Basically creepypastas are like the urban legends of the internet: creepy stories that people copy and paste onto multiple boards to the point where it's difficult to tell where it really originated from (although chances are it was 4chan).