Pikse (2018-11-02 09:09:40+00:00): I get that OSM values that its contributors map things in nature as they are and hence the "verifiable on the ground" principle. However, OSM also includes features that cannot be mapped in nature and that definitely cannot be verified on the ground, for example administrative boundaries that have to  be verified by other means. The same way it'd make very little sense to me if "verifiable on the ground" was applied to place names. Current guidelines seem to suggest that "name" key and it's variants provide name variant that is common in given language (local language for "name"). Name variant used by local residents of given place (village, town etc.) is not necessarily the same. If it isn't the same then it's a very specific kind of place name that you generally don't see on maps. Verifying common name in given language amounts to knowing conventions in given language, verifying local residents' name variant amounts to survey as part of ethnographic research (this does not mean "ask random resident"). Neither variant is really verifiable on the ground.

Argument that you make against using name:es for small city in Africa is really an argument against providing name variants in any language, including name:en, and even main "name" key as well as for many places there simply is no local resident that you can ask (especially the case for names of natural features). I understand it's up to OSM community to decide that they are not interested any data that isn't verifiable on the ground, just like it has decided it's not interested in e.g. elevation data. Currently however this does not seem to be the case as features like administrative boundaries and place names are common in OSM.

There is another page that describes why translating names is useful. My work on that generally aligns to it:
https://wiki.openstreetmap.org/wiki/Map_internationalization

You probably know there are world atlases in all kinds of languages. These atlases usually follow conventions of given language to write place names. For example, French atlas wouldn't omit place name in Africa merely because no Frenchman happens to live there, nor would it write it in non-Latin script.
I'm having hard time understanding how it'd possible to provide adequate place name data without doing it language by language and place by place. As already pointed out above, different languages use different romanization systems, and there are many exceptions to use of particular system in particular source and/or target language. Any fallbacks to English or automatic transliteration inevitably leads to a mess.

About avoiding transliteration I said "it doesn't look like a policy to me" only because referred page clarifies that there apparently was no wider discussion prior to writing it down. On same page you can see that it already has been questioned a while ago for obvious reasons. I'm planning to comment there as well later.

Database by the Institute for the Estonian Language is simply a prominent source in Estonian language. It's made by people who most likely know the subject and who are aware of conventions in onomastics in Estonian. It gives an overview of place names that you'd generally find on published/edited Estonian-language maps. This database is rather meant to be used for verification rather than meant to be verified itself.

About potential legal issue, in addition to what has been said already. Given kind of use is similar to using a dictionary. For example, if I checked many words from dictionary when helping to write some guideline for OSM or when participating in a discussion like this, then you would accuse me of violating copyrights of those who put together the dictionary or the database behind it?