The Greeks attached their own mythological explanation to why there would be a goat with a fish's tail in the sky.  One day the huge sea monster Typhon (represented by Cetus the Whale in the sky) gate-crashed a party the gods were having.  In a panic, they scattered everywhere.  The goat-god Pan jumped into the river to escape downstream and tried to turn himself into a fish, but in his haste he only turned the bottom half of himself into a fish's tail.  In the mean time Zeus was attacked by Typhon and had his muscles torn from his legs and arms.  Pan, emerging from the water saw this and blew loudly on his pipes to frighten Typhon away.  This also attracted attention from the other gods and they restored Zeus so that he was able to collect his lightning bolts and chase Typhon back to his lair.  In gratitude for Pan's help Zeus placed his half-goat, half-fish form in the sky. 

About two thousand years ago the Sun reached the southern-most point of it's annual journey within the stars of this constellation, hence the name of the Tropic of Capricorn.  Due to Precession this point now occurs in neighbouring Sagittarius.  This most southerly aspect offers some other clues as to why such an odd creature was created.  In those ancient times the Solstice for the Northern hemisphere occurred during Winter (as it still does), the cold and rainy season.  Capricornus, Aquarius and Pisces are all associated with water and have all contained the  Winter Solstice (of the Northern Hemisphere) at some time in the past. 

Algedi, sometimes spelt Algiedi, alpha (a) Capricorni, means "Goat" or "Ibex."   It is an optical double; that is, there are two stars so close they appear as a double but they are not physically related to one another.  Beta (b) Capricorni was also known as Dabih, "the Lucky one of the Slaughterers" which referred to a practice of the "heathen Arabs" who practised ritual sacrifices at the time of Capricornus' heliacal rising in ancient times.  Gamma (g) Capricorni was called Nashira, "the Fortunate One" or "the Bearer of Good Tidings".  This linked in with Deneb Algedi, the two making a prominent pair in their fairly empty patch of sky.  Such pairings were often known as "The Two Friends," so Nashira is merely a comment reflecting one half of the pair of friends.   The brightest star in the constellation is Deneb Algedi, delta (d) Capricorni, which means "the Tail of the Goat."