From Kingston, the Southern Scenic Route follows the edge of Lake Wakatipu for about 35 km to Drift Bay. This is one of several spectacular lakeside and coastal drives in NZ, with several safe places to stop for the view. Of these, the best known is Devils Staircase, a short winding section, first carved out of the cliff 40 metres above the Lake during the Great Depression. This was a time which seems to have been particularly popular for developing scenic highways (including Scenic Drive in Auckland and Milford Road in Te Anau, amongst others).
The new road displaced the previous steamboat ferry service from Kingston to Queenstown (the Earnslaw, still running as a lake cruise). Apparently, hundreds of cars lined up at the opening for the views on a drive through to Queenstown. Today, there is plenty of parking at the top of the twist in the road, with a spectacular 180 degree view.
The source of the name predates the road, and appears to reflect a couple of adventures people had when it was a rough edgy track high above the lake. Supposedly some cattle fell off at one stage and an early explorer was stuck there for a night. His (somewhat dramatised?) recounting led to the name.