The name comes from brothers W. Timbrell Pierce (1839-1922) and James Pierce (1833-1892) and it was first mentioned in a January 1886 article in the British Chess Magazine for which the two brothers regularly contributed. It was first played in the game between Louis Paulsen and Berthold English in 1887.
Curiously, in a letter to the British Chess Magazine in 1898, Timbrell Pierce stated that when he played over the below game which was widely published claiming Dinge had employed a "new gambit" he thought Dinge's 6.d5 was new and stated it looked strong.
However, Pierce discovered that he had actually published a short analysis on 6.d5 two years previously in Chess Monthly! So, it appears that when this game was played in 1898, Dinge was following Pierce's brief, but flawed, analysis that had been published in Chess Monthly.
I was unable to locate much information on Max Dinge except that, according to Edo Historical Ratings, he was born February 23, 1876 and the date of his death is unknown. Dinge is known to have played in three tournaments between 1896 and 1899 with a rating of around 2000.
Carl Walbrodt (November 28, 1871, Amsterdam – October 3, 1902, Berlin) was a German master who was very active in the 1890s. He gave simultaneous displays, taught chess, and played in many tournaments. Walbrodt also founded two chess clubs and wrote a chess column in the Berliner Lokal-Anzeiger from about September 1899 until February 1902. According to the Oxford Companion to Chess, he was diagnosed with tuberculosis in the early 1890s. He died from that disease at the age of 30. Chessmetrics put his rating at over 2600.
Unfortunately for Dinge, Pierce's analysis was defective and Dinge's name has been associated with an unsound gambit that has never been played since even though he won thanks to Walbrodt's atrocious defense.
I don't remember where, but I recently read an excellent blog post in which it was pointed out that you can't always trust the analysis published in books and magazines.