One of the rules of thumb you hear when studying Japanese culture is "Shinto for beginnings, Buddhism for endings," and it's true that most Japanese folks I know only really get involved with Buddhism or temples for funerals or other death-related matters, like visiting their ancestors' graves at certain times of year. So, it isn't surprising that many temples try to extract as much money as they can from the recently bereaved, since that's a major income source for them. (At least, as I understand it via Japanese media.)

One of the strangest results of this situation is the kaimyou, 戒名, literally "regulation name," a posthumous name that is sold -- almost never given -- to people, or more accurately to their families, and displayed at and after the funeral.

Originally, kaimyou were given to the living -- specifically, to people who had embraced Buddhism and agreed to follow the regulations. (Specifically, the big five: no killing, no stealing, no drinking, no lying, no adultery.) But now that everyone is born into Buddhism and really nobody becomes a monk or nun any more, the old kind of kaimyou is irrelevant, and they have gradually evolved into a weird form of conspicuous consumption. When you die, your relatives buy a kaimyou for you as part of the funeral service, and their choice will play a big part in determining the impressiveness of your funeral and grave marker.

As I understand it -- and Wikipedia backs me up, the actual kaimyou is only two characters long. This has always been the case, ever since Buddhism's earliest and best friend in Japan, Emperor Shoumu, received the houmyou (basically the same thing as a kaimyou) 勝満, pronounced Shouman, and meaning "Victory" + "Fulfilment".

(Nowadays, this is a popular name for tonkatsu restaurants, because if the first character is read in the native Japanese way, it becomes katsu. But I digress.)

But if kaimyou are always two characters long (because everyone is equal after they die), how do temples charge by the character? (Because oh yes, they do... something like 100,000 yen per, is the figure often quoted.) Well, this is ingenious: you can also buy extra characters that, although technically not part of the kaimyou, are still included wherever it is written down, and add to the general illustriousness of the thing. Also, most people don't really know or care about the difference: "the longer, the better" is the rule, and they're sticking with it.

The cheapest add-on character set is 信士 (shinshi) for men or 信女 (shinnyo) for women, both meaning basically "believer". The next step up is 居士 (koji, "someone who is there") or 大姉 (taishi, literally "big sister"). You can also get an ingou (院号) or an indengou (院殿号), both originally references to places of residence (院 is a common element in temple names) but quite divorced from that now. 院殿号 beats 院号, because it is longer. And, of course, you can throw a fully customisable set of characters in the middle there: this is called a dougou (道号), "way [of Buddhism] name".

I decided to try out the parsing rules on some famous examples. Here's AKUTAGAWA Ryuunosuke, a.k.a. 懿文院龍之介日崇居士:

懿文院 (the ingou, meaning "beautiful writing") +
龍之介 ("Ryuunosuke", his name -- I guess this counts as the dougou?) +
日崇 (the actual kaimyou, literally meaning "revere(s) the sun", but not uncommon as a monk name... to do with Nichiren, I think, rather than actual sun worship) +
居士 (koji, which is thrown in with the 院 part. In this context you can see how this is basically a fancy -san.)

Or consider enka queen MISORA Hibari, a.k.a. 茲唱院美空日和清大姉:

茲唱院 ("Luxurious/growing song", the ingou) +
美空 (her stage name, Misora ("beautiful sky"), again I guess used as a dougou) +
日和 (the actual kaimyou: "good weather" if read in Japanese) +
清大姉 (the female version of koji with 清 ("pure") added on the front as an optional extra)

Another singer, HONDA Minako, had a much simpler name: 釋優馨. The 釋 at the start would be 釈 in modern characters, and, pronounced shaku is a phonetic reference to Sakyamuni; the fact that her posthumous name begins with it indicates that what she has is a houmyou, the Pure Land equivalent. The other two characters are equivalent to the two-character kaimyou, and mean "lovely voice". There's no shinnyo or anything on the end because, apparently, Pure Land don't do that these days (I guess because their tradition is more about just praying than actually joining the temple?); the 釋 is their equivalent, I guess.
You know who had a ridiculously long one? TOKUGAWA Ieyasu, that's who. Actually, he apparently had two, but just check out the longest: 東照大権現安国院殿徳蓮社崇譽道和大居士. Damn.

東照大権現 ("Great Incarnation Illuminating (from?) the East" -- I'm not sure if this is technically part of the indengou below, or just a special bonus bit that got tacked on because he was the most powerful man in Japan. Certainly some places list his posthumous name without this bit, starting from...) +
安国院殿 (the indengou, meaning "safe[ly governed] country") +
徳蓮社 (part of the dougou, I think, and apparently a Tokugawa thing (the "徳" is the "Toku")) +
崇譽 ("Revere" + "Glorify" -- Still in the dougou, I believe...)
道和 (the actual kaimyou -- "Harmony of the Way")
大居士 (supersized koji).

There are also special kaimyou-compatible titles for those who die underage, from 童子/童女 (male/female child) all the way down to 水子 (the infamous mizuko, referring to those who die before being born), but those are too depressing to talk about.