croft-
The choice of the word Daesh is a western acronym for 'al-dowla al-islaamiyya fii-il-i’raaq wa-ash-shaam' = 'Islamic State in Iraq and Syria'.
Daesh is five letters not four (‘in’ and ‘and’ are omitted so it's just ISIS/L) because the Arabic letter 'ع' which begins the word for 'Iraq' is difficult/impossible to pronounce for an anglophone hence the use of an 'e' (or occasionally an ’e) in the transliteration.
They don't really use acronyms in arabic so they consider it to be a funny made up word not the legitimate 'Islamic state' title they want. I think that a lot of people are reluctant to legitimise their status by calling them the Islamic State/ISIL/IRAQ too, and I know some (I think the French and the US) have been particularly keen on only using the term daesh and avoid any official sounding titles etc.
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In Arabic word-play it is a derogatory term which Daesh really don't like. Anything which makes Daesh a little less in charge of there own name is destabilising and a good thing. The BBC are a little slow to take it up but Cameron suddenly loves using it.
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This is a far more nuanced explanation of the term Daesh than most explanations you'll find:
https://www.freewordcentre.com/blog/2015/02/daesh-isis-media-alice-guthrie/tl,dr: It's Arabic word-play that they don't like. I'd rather call them that because they don't like it.
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fallschirmjäger
Constable_Savage
h2o
The reasoning in this is, I think, sound:
http://www.bloombergview.com/articles/2015-12-02/islamic-state-s-new-strategy-is-suicidal
Which is why I think military action could actually prevent Daesh from doing any more damage.
Doesn't detract from need for longer-term solutions in the region. But Daesh shouldn't really have a seat at that table.