Here's why:

* Fe represents the element Iron.

* O represents the element Oxygen.

* The subscript 2 after Fe indicates there are two iron atoms in the compound.

* The subscript 3 after O indicates there are three oxygen atoms in the compound.

* Iron(III) refers to the oxidation state of iron in this compound, which is +3. This means each iron atom has lost three electrons.

* Oxide refers to the presence of oxygen in the compound, which has an oxidation state of -2, meaning each oxygen atom has gained two electrons.

Therefore, the name Iron(III) oxide accurately describes the ionic compound formed by Fe₂O₃.