Wordorigins.org

The Golden State’s name most likely comes from a Spanish romance written in 1510. Las sergas de Esplandian (The Exploits of Esplandian), by Garcia Ordóñez de Montalvo, contains a reference to a fictional island called California. Since the name was deliberately coined in fiction, we don’t know for sure what roots Ordóñez used to come up with California. It could be from the Spanish califa, succession, or calif, sovereign. Or he could have combined the Latin calida and forno into a word that roughly meant hot furnace.

Hernando Cortes was the first European to visit the peninsula of Baja California in 1535 and the name was applied either by him or someone who followed shortly after him. What is now the US state is Alta, or upper, California. The name was appearing in English texts by the 18th century.

(Sources: Illustrated Dictionary of Place Names; Webster’s Third New International Dictionary)