Bdtyk

A while ago in January The Black Hebrew Israelites were speaking/shouting/proselytizing to surrounding people in at Lincoln Memorial. The speaker claimed that the word "Indian" means "savage" When challenged on this by an individual, this person says that he's a historian and that the word "Indian" is a Spanish word meaning "God-like people". Interestingly the speaker from the Black Hebrew Israelites agreed with him.

Here is a link to the video of this discussion.

I had never heard this etymology before. I searched a number of dictionaries but they didn't give an etymology. At Merriam-Webster many of the user who looked up the word said they were prompted to do so because of this section of the video.

So I went to Online Etymology Dictionary, and found no trace of the word God.

In my admittedly meager research I did find a question on this very site, Why do Americans still call Native Americans “Indians”?. Interestingly I found some trace of this etymology from a quotation of comedian George Carlin in the second answer. I quote from the quotation from the answer of that user:

Now, the Indians. I call them Indians because that's what they are. They're Indians. There's nothing wrong with the word Indian. First of all, it's important to know that the word Indian does not derive from Columbus mistakenly believing he had reached "India". India was not even called by that name in 1492; it was known as Hindustan. More likely, the word Indian comes from Columbus's description of the people he found here. He was an Italian, and did not speak or write very good Spanish, so in his written accounts he called the Indians "Una gente in Dios". A people in God. In God. In Dios. Indians. It's a perfectly noble and respectable word.

Now, in fairness, I noticed that Carlin says "more likely the word Indian comes from", so it seems he qualified that statement with an expression of uncertainty.

Anyway, that's what I found. In a comment to that answer a user comments:

Deriving "Indian" from "In Dios" really really really sounds like a backronym (or backmanteau, or whatever). George Carlin was a comedian, not an etymologist or historian.
Link

I have good reason to doubt this etymology, but it's surprising that it seems to be a popular etymology doing the rounds, such that two speakers in that video believed it, one of whom claimed he was a historian, and George Carlin also spread this.

My first question is: This is a false etymology, right? If so, any idea where it originated?

Second question (just for general knowledge): The word India was used for the geographical area of India going back a long way correct? It's not the case that it was only referred to as Hindustan. My reading on Wikipedia suggests that "India" was used by Herotodus in 4th century BC and from the 9th century in Old English.