Good question! There are many theories on why people from Indiana are called Hoosiers. We have a short summary of some of those theories here: http://www.in.gov/history/2612.htm. However, we recommend this well-researched essay by Jeffrey Graf, Reference Associate at the Herman B. Wells Library, Indiana University: http://www.indiana.edu/~librcsd/internet/extra/hoosier.html.
Still have questions? The IU library can be reached at 812-855-0100.