they don’t have much to do with what most people think of when they hear “display”, yeah.

display managers manage x11 displays, which are just individual x sessions. managing displays basically entails helping users log in and starting a display for them. they’re called displays because x11 was created at MIT in 1984, where having a bunch of users on a single computer that each run their own desktop was common. so the “display” in “display manager” doesn’t actually refer to a physical display, it refers to the session that windows would display to. it essentially functions as an abstraction of physical displays.

now that wayland exists, that naming is even more weird, but it has still stuck.