A hundred years ago, this street was always crowded with flowers each time the Palace held ceremonies. Malioboro that in Sanskrit means "bouquet" serves as a basis for naming this street.
Source:
http://www.yogyes.com/en/yogyakarta-tourism-object/places-of-interest/malioboro/
http://www.kompas.com/kompas-cetak/0706/11/jogja/1038367.htm