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"inhabit of India or South Asia," c.1300 (noun and adjective); applied to the native inhabitants of the Americas from at least 1553, on the mistaken notion that America was the eastern end of Asia. Red Indian, to distinguish them from inhabitants of India, is first attested 1831 (Carlyle) but was not commonly used in North America. More than 500 modern phrases include Indian, most of them U.S. and most impugning honesty or intelligence, e.g. Indian giver, first attested 1765 in Indian gift:
An Indian gift is a proverbial expression, signifying a present for which an equivalent return is expected. [Thomas Hutchinson, "History of Massachusetts Bay," 1765]Meaning "one who gives a gift and then asks for it back" first attested 1892.