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This was used to distinguish us from the people of India. Thus the term "American Indian" was born. The indigenous inhabitants of the Americas are not from India. I do not know which story is correct, or if both might be. This phrase evolved into Indios in the Spanish-speaking world, and Indians among English-speakers. When Columbus arrived in the New World, he saw what he called "En Dios," or the children of god. Columbus was looking for the spice islands of the country Hindustan, as India was called by the Europeans at that time. There is one smaller group of scholars who believe this story is in error. Had they been fair skinned, they might have been considered Chinese. When he found dark skinned inhabitants on the islands of the Caribbean, he assumed they were people of India. The story goes that Columbus was looking for the spice islands of India. Globally, it was originally used to describe the people of India. No one thought Indian was a derogatory word. The reason this word came into being was concern over the use of the word Indian. The stated purpose of the term "Native American" was to describe the original inhabitants of this continent, and their descendents.
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You pose a simple, but difficult, question. They also wanted to know how they could explain this difference to young students. Someone recently asked me about the differences between the terms “American Indian” and “Native American,” and my preference among the terms. Tribal Names and the Lewis and Clark Corps of Discovery
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