While Shakespeare was busy with names in Romeo and Juliet, Europeans began exploring and settling the New World and immediately ran into the problem of naming. For instance, what should they call those enormous mammals that look sort of like cows but are larger, stronger, and furrier? Buflalo? Bison? Tatanka? And what should they call all the people they kept running into? Tradition holds that Christopher Columbus started it. He was confused because of geography; he thought he had found India, so he called the native people he met by the Spanish word indios, the English counterpart of which is, of course, Indians.
What can be said positively of the Europeans is that often they honestly tried to learn the names that already existed: many slate names like Alabama and Massachusetts closely resemble the original Indian words. Some of the tribes' English names also closely approximate the native languages. For example, some Cherokee call themselves Tsalagi, which sounds roughly similar to Cherokee. Further, the word Omaha is quite similar to the native word it comes from, Umonhon.
Bramlett, Frank, "Name Trouble - Part Two" (2003). English Faculty Publications. 47.