Dunyazad
Dunyazad appears in the One Thousand and One Nights tradition; etymologically it combines dunya ('world') with the Persian/Avestan-derived suffix -zād meaning 'born of'.
No. Dunyazad is a literary character in the Nights; she is not a figure from the Quran or authenticated Hadith collections.
In Urdu: 'دنیا سے پیدا' (born of the world). In Arabic phrasing: 'مولودة الدنيا'.
Yes; while literary and uncommon, it is a culturally rooted name and not religiously problematic. Families who prefer names from Persian-Arabic literary heritage sometimes choose it.
Commonly pronounced 'DOON-ya-zad' (stress on first syllable).