Final answer:
Mary and Louis Leakey named the species Homo habilis, which means "handy man," based on the evidence of tool use associated with its remains, despite later findings that stone tools predate the species.
Step-by-step explanation:
Mary and Louis Leakey called early Homo "habilis" because the species exhibited characteristics that suggested a capacity for crafting tools, which is implied by the term "habilis" meaning "handy." This nomenclature was based on archaeological evidence showing Homo habilis with stone tools, indicating that they had the required dexterity and cognitive skills for tool use.
The discovery that stone tools predate Homo habilis challenged the initial assumption that they were the first to create tools. However, the species still represents an important evolutionary step in the genus Homo due to its larger brain size and other human-like features such as reduced prognathism, suggesting a transition from older hominin species to a more advanced stage in hominid development. The taxonomic significance of Homo habilis has been debated, with some researchers proposing an alternative archaic Homo species, like H. rudolfensis, as being a potential ancestor of later Homo species.