According to this page (from which the rough map location shown
here is taken): When Charnel chapel, St. Paul’s, was taken down
by the Protector Somerset, in 1549, more than 1,000 cart-loads
of bones were removed to Finsbury Fields, where they formed a
large mound, on which three windmills were erected. It was from
these mills that the street obtained its name. (Leigh Hunt.) The
Wikipedia page on nearby Bunhill Fields also says: …in about
1549, cart-loads of human bones were periodically brought here —
some one thousand loads in total — to make space in St Paul’s
charnel house for new interments. The dried bones were simply
deposited on the moor and capped with a thin layer of soil,
leading to such topographical elevation of the otherwise damp,
flat fens, that three windmills could safely be erected in a
spot that came to be known as Windmill Hill. Related, Wikipedia
has a long list of all the historical locations of windmills in
what is now Greater London.