Answer:
"AMG" (Aufrecht Melcher Großaspach) is an abbreviation which stands for: Hans Werner Aufrecht (A) and Erhard Melcher (M) who were partners, while Aufrecht's birthplace of Großaspach (G) supplied the third letter in the company name.
AMG was a private performance shop...totally independent of MB...that was known for really doing great looking and performing enhancements...generally very expensive...to MBs. things like multiple turbo chargers, airodynamics, etc. I believe they had race success too.
They began to make more their more common upgrades in almost a package form...were recognized by MB and finally MB bought the name and business and put it on production vehicles...of course really more as a sport or performance version of existing models.