Wordorigins.org

This name for the American South first appears in 1859 in the lyrics of a minstrel song. The etymology is uncertain, but it is most likely a reference to the Mason-Dixon Line, the border between Pennsylvania and Maryland delimited by those eponymous surveyors.

The first recorded use of the of Dixie is from the song Johnny Roach, by Daniel D. Emmett, first performed in February 1859:

Gib me de place called Dixie land,
Wid hoe and shubble in my hand.