America is named after explorer Amerigo Vespucci. The official name of our country is United States of America thus we are called "Americans" not just by the Britons but by most nations around the world. As noted above, the Americas were named after Amerigo Vespucci, an Italian navigator working in service to the Portuguese.
This naming first was popularized by a German map-maker (Martin Waldseemuller), who in 1507 produced a map labeling the newly discovered continents as "America". In common English, the term "America" can be applied to two entities: either the entire New World landmass (North, Central, and South Americas), or to the nation of The United States of America. At the time of creation of the U.S.A., it was still very common to refer to the New World as "the Americas" (note the plural and capitalization), though the use of "america" (lower case, singular) was uncommon, and the adjective "american" was even less common - the reason american was seldom used was because it was exceedingly vague, and, in any case, the English tended to prefer the terms "the Colonies" or "the New World". It is unclear why the Founding Fathers of the U.S.A. chose to use the singular in the name, rather than the plural.
In any case, after the founding of the U.S.A., both the new country's citizen and the British began to use the shortened "American" to describe nationals of the U.S.A., and now used "America" (capitalized) as a shorthand for the United States. This is likely due to similar shortening of "Great Britain" to "British", and is a common usage pattern in English (that is, the use of the last noun in a long formal name as a "nickname" for the thing). Both British and American English has not come up with a suitable equivalent to "European" to describe a person who comes from the New World, as the common usage of "American" has now been completely changed to refer solely to the U.S.A. English uses the awkward "North American", "Central American", and "South American" to refer to those areas.
Other languages (chiefly Spanish and Portuguese) still retain the secondary meaning of "american" (non-capitalized) to refer to the entire New World. However, in any context or language, the proper meaning of a capitalized "American" specifically refers to the U.S.A.
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