From Merriam-Webster
Spline
Etymology: origin unknown
Date: 1756
1 : a thin wood or metal strip used in building construction
2 : a key that is fixed to one of two connected mechanical parts and fits into a keyway in the other; also : a keyway for such a key
3 : a function that is defined on an interval, is used to approximate a given function, and is composed of pieces of simple functions defined on subintervals and joined at their endpoints with a suitable degree of smoothness
Sim City 2000 maps are based on a 256×256 grid of squares, each with its own elevation. Granted, the possible elevations are discrete, rather than continuous, but there is a certain smoothness to the map if you look at the medium-scale structure. I always assumed they drew a smaller network, say 16×16, of random elevations, and connected them with a smoothing function in both dimensions. While this process may not technically be reticulation of splines, it’s kind of close. It does sound darn cool when that voice says “reticulating splines”.
I agree that when The Sims says it, it’s simply a reference to SC2K, even though The Sims landscapes are based on similar grids.