Yes, I read about this in a magazine. Papaya is actually a herb, but since it's so large as a herb, Europeans naturally thought it was a tree when they first saw it. Actually, that's what I thought too when I saw papaya "trees." They can be really big and tall. That's why it was given the name "tree melon." The name has sort of stuck now.
I think the best name for it is the one used in Australia. Papaya is called pawpaw there.