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Was it a corruption of some French term or was it intended to mean that the people to whom it referred were like savage "red Indians"?
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I always thought it was named after the famous "warrior" tribe known for their "fighting" prowness.
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Apache (pronounced "ah-pash") is a French term for a street brawler, hooligan, or troublemaker. The French named many Indian groups in North America, among them the Apache, which the Spaniards and later Americans mispronounce "ah-patch-ee". Regardless, the term existed many years before the discovery of the Americas, and is still used to describe miscreants (although somewhat archaic).