According to the APA's dictionary, the theory of mind (ToM) is defined as:
[T]he ability to imagine or make deductions about the mental states of other individuals: What does the other individual know? What actions is that individual likely to take? Theory of mind is an essential component of attributing beliefs, intentions, and desires to others, specifically in order to predict their behavior.
The idea of ToM derives from Premack and Woodruff's 1978 article titled "Does the chimpanzee have a theory of mind?". They showed the short vieotape to a chimpanzee, in which a human actor was struggling in a cage to obtain bananas that were out of reach and inaccessible. And then they offered her a pair of the photographs, one constituting a solution to the problem (reaching out of the cage with a rod) and the other not. She could steadily choose the correct one. The chimpanzee seemed to be able to read the human actor's intention.
[I]n saying that an individual has a theory of mind, we mean that the individual imputes mental states to himself and to others (either to conspecifics or to other species as well). A system of inferences of this kind is properly viewed as a theory, first, because such states are not directly observable, and second, because the system can be used to make predictions, specifically about the behavior of other organisms.
[Premack, D. G. & Woodruff, G. (1978). Does the chimpanzee have a theory of mind? Behavioral and Brain Sciences, 1: 515-526. p.515]
In another part they also wrote:
[I]n assuming that other individuals want, think, believe, and the like, one infers states that are not directly observable and one uses these states anticipatorily, to predict the behavior of others as well as one's own. These inferences, which amount to a theory of mind, are, to our knowledge, universal in human adults.[ibid. p.525]
So, we can find two reasons here, for those they named 'theory' one's ability to infer another person's mental states and to predict his/her behavior.
1. mind is invisible or inaccessible
The mind is not directly observable. No one has direct access to the mind of another. One needs to infer what another knows, thinks, and wants based on a kind of theory.
2. behavior is readable or predictable based on ToM
But the same mind is readable based on the theory of mind. ToM, like other scientific theories or principles, makes us possible to predict the other's behavior.
The notion of ToM has these two presumptions in the background. But are they correct? The other mind is something invisible and hidden inside and what we can do is only to infer his/her mental states and to predict his/her behaviors based on an abstract theory?
It is sure that this is a variation of the classic problem of the other mind, which has been discussed in the philosophy after Descartes' mind-body dualism. If the mind should be separated from the body, we have to find the other's mind behind his/her actions. In order to understand the other, we need to infer the mental states from his/her movements of the body.