Tendencies in The Development of Exonyms
James A. Matisoff, who introduced the term "autonym" into linguistics, said, "Human nature being what it is, exonyms are liable to be pejorative rather than complimentary, especially where there is a real or fancied difference in cultural level between the ingroup and the outgroup." For examples, Matisoff notes Khang "an opprobrious term indicating mixed race or parentage" is the Palaung name for Jingpo people and the Jingpo name for Chin people; both the Jingpo and Burmese use the Chinese word yeren 野人 (lit. "wild men") "savage; rustic people" as the name for Lisu people.
Exonyms develop for places of significance for speakers of the language of the exonym. Consequently, most European capitals have English exonyms, e.g. Athens (Αθήνα/Athína), Belgrade (Београд/Beograd), Bucharest (Bucureşti), Brussels (Bruxelles, Brussel), Copenhagen (København), Lisbon (Lisboa), Moscow (Москва/Moskva), Nicosia (Λευκωσία/Lefkosía), Prague (Praha), Rome (Roma), Vienna (Wien) and Warsaw (Warszawa), while for instance historically less prominent capitals Ljubljana and Zagreb do not (but do have exonyms in e.g. German: Laibach and Agram). Madrid, Paris, Berlin and Amsterdam, with identical names in most major European languages, are exceptions. For places considered to be of lesser significance, attempts to reproduce local names have been made in English since the time of the Crusades. Livorno, to take an instance, was Leghorn because it was an Italian port essential to English merchants and, by the 18th century, to the British Navy; not far away, Rapallo, a minor port on the same sea, never received an exonym.
In earlier times, the name of the first tribe or village encountered became the exonym for the whole people beyond. Thus the Romans used the tribal names Graecus (Greek) and Germanus, the Russians used the village name of Chechen, medieval Europeans took the tribal name Tatar as emblematic for the whole Mongolic confederation (and then confused it with Tartarus, a word for Hell, to produce Tartar), and the Magyar invaders were equated with the 500-years-earlier Hunnish invaders in the same territory, and were called Hungarians.
The Germanic invaders of the Roman Empire applied the word "Walha" to foreigners they encountered and this evolved in West Germanic languages as a generic name for all non-Germanic speakers; thence, the names Wallachia, Vlachs, Wallonia, Walloons, Cornwall, Wales, Wallasey, and even the Polish name for Italy, Włochy.
Read more about this topic: Exonym And Endonym
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