I am looking to understand the following theorem, and I am also wondering what is meant by "mutually disjoint", or at least how it's to be understood in the following context:
The distinct equivalence classes of an equivalence relation on $A$ provide us with a decomposition of $A$ as a union of mutually disjoint subsets, conversely given a decomposition of $A$ as a union of mutually disjoint, nonempty subsets, we can define an equivalence relation on $A$ for which these subsets are the distinct equivalence classes.
I am also looking to know if there is any common name to this theorem, or any best accepted proof of this? Also, I am just wanting to better understand the intuition of this, and why it holds and makes sense, etc. Thank you.
I would call the result you're asking about the "fundamental theorem for equivalence relations" (relevant Wikipedia link; also, take a look here), but the result is also tantamount to the "first isomorphism theorem for sets".
The intuition for this theorem is extremely simple:
We start with a set of objects, $X$. If I tell you a rule (the rule is usually named $\sim$) which says when two elements of $X$ are "related", then I can divide the objects of $X$ into groups where
(that's the "mutually disjoint" collection of subsets of $X$).
Conversely, if I've divided the objects of $X$ into some arbitrary groups, then I can define a rule that says two objects of $X$ are related if and only if they are in the same group.
A collection of sets $\mathcal{S}=\{S_\alpha\}_{\alpha\in I}$ is mutually disjoint (relevant Wikipedia link), sometimes just disjoint for conciseness, if for any two distinct $\alpha,\beta\in I$, we have $$S_\alpha\cap S_\beta=\varnothing.$$ Thus, for example, the collection $\mathcal{T}=\{\{x,y\},\{w,z\},\{a,b\}\}$ is mutually disjoint because $$\begin{align*} \{x,y\}\cap\{w,z\}&=\varnothing\\ \{x,y\}\cap\{a,b\}&=\varnothing\\ \{w,z\}\cap\{a,b\}&=\varnothing \end{align*}$$ but the collection $\mathcal{U}=\{\{1,2\},\{3,4\},\{1,5\}\}$ is not, because $$\{1,2\}\cap \{1,5\}=\{1\}$$