Adolf Hitler did not like being called a Nazi.
Nazi was a derogatory term for a backwards peasant, being a shortened version of Ignatius, a common name in Bavaria, the area from which the Nazis emerged.
Opponents seized on this and shortened the party's title to the dismissive Nazi.
The term Nazi derives from the first two syllables of the name given in German to a party member Nationalsozialist and was coined in response to the German term Sozi, an abbreviation of Sozialdemokratische Partei Deutschlands (Social Democratic Party of Germany). Members of the party referred to themselves as Nationalsozialisten (National Socialists), rarely as Nazis.
The term was in use before the rise of the party as a colloquial and derogatory word for a backward peasant, characterising an awkward and clumsy person.
The term was not used by the Nazis to describe themselves. Since the late 1930s, however, the term Nazi has come to symbolise what that party became.
In 1933, when Hitler assumed power of the German government, usage of the designation Nazi diminished in Germany, although Austrian anti-Nazis continued to use the term derogatorily.
Under the leadership of Hitler, the National Socialist German Workers’ Party developed into a mass movement and ruled Germany through totalitarian means from 1933 to 1945. Founded in 1919 as the German Workers’ Party, the group promoted German pride and anti-Semitism. Hitler joined the party the year it was founded and became its leader in 1921. In 1933, he became chancellor of Germany.
An older use of Nazi for national social is attested in German from 1903. The NSDAP for a time attempted to adopt the Nazi term, but gave this up and the NSDAP is said to have generally avoided the term.
According to Mark Forsyth writing in The Etymologicon, opponents quickly shortened the term to Nazi, which had been a term of abuse for years.
“Hitler wouldn’t have called himself a Nazi,” Forsyth said.
The NSDAP briefly adopted the Nazi designation, attempting to reappropriate the term, but soon gave up this effort and generally avoided it while in power. The use of "Nazi Germany", "Nazi regime", and so on was popularised by German exiles abroad.
The book Strange and Fascinating Facts by Don McCombs and Fred L. Worth claimed that Konrad Heiden was the individual who coined the term Nazi, but this was quickly disputed. The book said Heiden was forced to flee Germany in 1933 because of his anti-Hitler stand.