Too many variables can indicate that a routine is doing too many things.

Why is this an issue?

Using many variables in a routine can be an indicator that the routine is doing too many things. A routine should be a single logical task, not a number of disconnected tasks.

Using a large number of redundant variables in a short span of code can also adversely affect readability.

How to fix it

Consider breaking the routine up into multiple routines with different responsibilities:

procedure TMyObject.DoThing;
var
  MyFoo: TFoo;
  MyBar: TBar;
begin
  MyFoo := TFoo.Create;
  FMyFoo := MyFoo;

  MyBar := TBar.Create;
  FMyBar := MyBar;
end;

procedure TMyObject.DoFooThing;
var
  MyFoo: TFoo;
begin
  MyFoo := TFoo.Create;
  FMyFoo := MyFoo;
end;

procedure TMyObject.DoBarThing;
var
  MyFoo: TFoo;
begin
  MyBar := TBar.Create;
  FMyBar := MyBar;
end;

Another option is to inline unnecessarily verbose variables:

procedure TMyObject.DoThing;
var
  MyFoo: TFoo;
  MyBar: TBar;
begin
  MyFoo := TFoo.Create;
  FMyFoo := MyFoo;

  MyBar := TBar.Create;
  FMyBar := MyBar;
end;

procedure TMyObject.DoThing;
begin
  FMyFoo := TFoo.Create;
  FMyBar := TBar.Create;
end;