Many people know that Amerika was named after Amerigo Vespucci. It turns out tha Amerigo is the Medieval Italian name for Emmerich, a rather uninspiring German city close to the Dutch border.
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Emmerich is also just an old-fashioned German name. I would assume that the name Amerigo is derived from the name Emmerich, not the town Emmerich.
Why would it be named after an obscure city?
It’s not named after the city, it’s named after the guy who was named after the obscure city