Sometimes they call it Holland, sometimes they call it The Netherlands, and sometimes they call it the Low Countries. And the people who live there are Dutch, which is also the name of their language. Here is a guide for the perplexed.
Het koninkrijk der Nederlanden, or Kingdom of the Netherlands, is the official name of my country. It is usually abbreviated to Nederland (singular). The name seems to have its origin in the fifteenth century, when the Dukes of Burgundy ruled both their own duchy and several provinces in what is now called Belgium, Luxembourg, and the Netherlands. They made a distinction between the Pays de par delà (the countries up there) and the Pays de par deça (the countries down here), which was sometimes rendered as the upper and lower countries. Therefore, Belgium, Luxembourg, and the Netherlands can still be called The Low Countries. It is a bit poetic.
The unity of the Burgundian countries par deça was formalized in 1512, when the German Empire of Charles V was restructured and seventeen countries were united in “the Burgundian Circle”. In the Pragmatic Sanction of 1549, it was laid down that these seventeen provinces would always have one lord. However, the centralizing policy of the Lord of the Netherlands (Charles V, later Philip II) was not appreciated by the countries. War broke out, and in 1581, the northern countries left this circle (the Act of Abjuration).
The southern provinces, once called the Spanish Netherlands, have become modern Belgium; the northern part was recognized as an independent “Republic of the Seven United Provinces” (Treaty of Nonsuch, 1585). The most important of these seven provinces was the County of Holland, which explains why in nearly every language, the Republic was and is called Holland. There is nothing strange about this: the Magyars are called Hungars, the inhabitants of Deutschland are called Germans, the Jews live in Israel.
Nobody objected to the name Republic of the Seven United Provinces, but in the mid-eighteenth century, many people were unhappy with the slow decision making. They thought of the seven countries as one nation, and started to use the expression Nederland (singular). Many of their ideas were implemented when Napoleon conquered the Republic and appointed a king (his brother Louis), who called his state Kingdom of Holland. When, after Napoleon’s defeat, Belgium and Luxembourg were added to this kingdom, it was called Kingdom of the Netherlands (plural), a name that is still used in official documents, in spite of the fact that Belgium became independent in 1830 and Luxembourg in 1890.
Most Dutch-speaking people call the country Nederland, and will explain to foreigners that Holland is only a part of Nederland. Of course it is up to those speaking other languages to create names of their own, but it may be noted that there is indeed a difference between cosmopolitan Holland (plus the western part of the province of Utrecht) and the more rural parts of the country.
Which leaves the question why the people and the language are called Dutch. This a very ancient, Germanic word: teut means “people” (c.f., Teutones, Teutoburg Forest), and in the Middle Ages, words like deutsch and diets were used to describe anyone who did not speak and write Latin: the greater part of the population. The Germans still call their nation Deutschland, which means “the land of the people”; the inhabitants of the Netherlands have dropped this name, but it survives in the English word Dutch.
Finally, a word about pejoratives. Expressions like “Dutch courage” and “Dutch treat” appear to have their origin in Pennsylvania, where a group of German-speaking people has been recognizable until the twentieth century. They called their language Deitsch. English-speaking people in the Netherlands have invented the word cloggies to describe the Dutch, whereas the Moroccan minority calls the native population kazen (cheeses); the Belgians call their northern neighbors diknekken (fatnecks); and when a Dutchman wants to insult some provincially-minded compatriots, he calls them kaaskoppen (cheeseheads).