a name added to or substituted for the proper name of a person, place, etc., as in affection, ridicule, or familiarity: He has always loathed his nickname of “Whizzer.”
a familiar form of a proper name, as Jim for James and Peg for Margaret.
verb (used with object), nicknamed, nicknaming.
to give a nickname to (a person, town, etc.); call by a nickname.
Archaic. to call by an incorrect or improper name; misname.

1400–50; late Middle English nekename, for ekename (the phrase an ekename being taken as a nekename). See eke2, name; cf. newt

nicknamer, noun
unnicknamed, adjective Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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World English Dictionary
nickname (ˈnɪkˌneɪm)
1.  a familiar, pet, or derisory name given to a person, animal, or place: his nickname was Lefty because he was left-handed
2.  a shortened or familiar form of a person's name: Joe is a nickname for Joseph
3.  (tr) to call by a nickname; give a nickname to
[C15 a nekename, mistaken division of an ekename an additional name, from eke addition + name]

Collins English Dictionary - Complete & Unabridged 10th Edition
2009 © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins
Publishers 1998, 2000, 2003, 2005, 2006, 2007, 2009
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Word Origin & History

1440, misdivision of ekename (c.1300), an eke name, lit. "an additional name," from O.E. eaca "an increase," related to eacian "to increase" (see eke).
Online Etymology Dictionary, © 2010 Douglas Harper
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Example sentences
It is this habit that's given rise to their nickname, honey bears.
Everyone forgets the obvious: they have that nickname because they outnumbered
  every other living generation.
Such troglodytes, as their nickname suggests, often come from unfashionable
  parts of the country.
The bike earned its nickname because of the cooling fins on its cylinder head.
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