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UTC hasn't replaced GMT it operates alongside. Greenwich mean time is so called due to the discovery of longitude calculations, and the invention of the Marine Chronograph by Harrison.

Astronomers who were based at the observatory in Greenwich near London discovered that latitude (How far around the Earth you are) could be calculated in one of two ways. Either by measuring the distance from the Earth to the moon, or if they could figure out some fixed point on Earth, they could calculate the position by time. The problem was that there were no clocks that were accurate enough when at sea to calculate latitude. Of course the Royal astronomers preferred the moon measuring method, but to do this required an accurate fix on the moon using a telescope (Not much hope of that on a rolling deck of a sailing ship!). Thier observations were generally carried out during landfall. They did try a number of ingenious methods to stabilise the telescope to make the observations but none were practical.

Step into the picture an Englishman called John Harrison (1693-1776) who competed for a cash prize (Which in todays currency would equate to millions of pounds) set by the Royal Navy's Admiralty to calculate longitude. John spent nearly 40 years of his life trying to convince the admiralty and the Royal astronomers that his clock method of calculating latitude was the most accurate, eventually hand crafting a number of chronographs clocks accurate to a few seconds per month.

The clock allowed the ships master to know the time in Greenwich when it was exactly midday where he was. If you know the difference between your time and the time at a fixed location then you can calculate your longitude (How far around the Earth you are). Finding exactly midday was easy too, by using a sextant to 'shoot' the sun and calculate the angle you can find out when its directly overhead. So with these two tools combined Longitude could now be calculated.

Since the location chosen as the reference point was the observatory in Greenwich this became Zero degrees longitude and hence Greenwich Mean Time or GMT.

Like most scientific discoveries the inventor gets to name the invention or discovery like Volts for Voltaire or Ohms. But unfortunately due to political correctness some countries insist on delocalising the name. However if you ever come to Greenwich just outside London, you can visit the Royal Observatory, see the Harrison clocks and even be photographed with one foot either side of zero longitude.

Take a look at the links section for more info and photos of Longitude zero.

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Q: When did the term UTC replace the term GMT?
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