O.E.
Crecas (pl.), early Gmc. borrowing from L.
Græci "the Hellenes," from Gk.
Grakoi. Aristotle, who was the first to use
Graikhos as equivalent to
Hellenes (
"Meteorologica" I.xiv) wrote that it was the name originally used by Illyrians for the Dorians in Epirus, from
Graii, native name of the people of Epirus. But a modern theory (put forth by Ger. classical historian Georg Busolt, 1850-1920), derives it from
Graikhos "inhabitant of
Graia" (lit. "gray"), a town on the coast of Boeotia, which was the name given by the Romans to all Greeks, originally to the Gk. colonists from Graia who helped found Cumae (9c. B.C.E.), the important city in southern Italy where the Latins first encountered Greeks. It was reborrowed in this general sense by the Greeks. Meaning "unintelligible speech, gibberish" is from 1600. Meaning "Greek letter fraternity member" is student slang, 1900.
"It was subtle of God to learn Greek when he wished to become an author -- and not to learn it better." [Nietzsche, "Beyond Good and Evil," 1886]
Greek gift is from
"Æneid," II.49:
"timeo Danaos et dona ferentes." The Gmc. languages originally borrowed the word with an initial
-k- sound (cf. O.H.G.
Chrech, Goth.
Kreks), which was probably their initial sound closest to the Latin
-g- at the time; the word was later refashioned.
[greek] 
