A lot of people are shocked to learn that this word was only invented in the 1960's.
Up until that point there were Mexicans
etc. Even today when a "Hispanic" person is asked the ever-problematic question "what are you?
" they will normally reply Cuban
, Columbian etc.
Whence this new arrival in our vocabulary of race
In a word, Bureaucrats. Why they inflicted it upon us is a product of two historical factors.
1) South American Dictatorships started to crumble, and immigration laws were changed to make it easier to gain American citizenship.
2) The Civil Rights Movement, once American Blacks beat segregation, they soon started to get all sorts of goodies, not least of which would be affirmative action. Certain spanish-speakers wanted on the gravy train, but could muster no political capital so long as "their people" stayed divided into more accurate categories. A great, big broad banner, was formed: hispanic. This banner, like "black" spanned more than culture, and unlike "black" spanned more than skin colour. You can be hispanic, and not even speak spanish, if you're Mom is hispanic but never bothered to teach you Spanish, you can claim Hispanic status too.
The word itself was derived from some 17th century Spanish maps that termed all of Spain's conquests Hispania. It was adopted on as a category on the U.S. census, and a new ethnicity was born.