Some nationalities have it easy - while exceptions apply, Germans typically come from Germany and speak German, Italians come from Italy and speak Italian, and so forth. It's only nominally more complicated in the case of, say, the French and Spanish, with demonyms like French(wo)men and Spaniards, but the words are still clearly related. Then there's the Dutch, some of whom say they come from Holland, others who fiercely deny that they're from Holland but rather the Netherlands ...
What does it all mean, and where does this confusion of terms come from?
The Netherlands and Holland: The Two Place Names in Depth
We've covered the difference between the Netherlands and Holland in a previous article - the Netherlands is the country as a whole, while Holland comprises just the two provinces of North and South Holland. The fact that these are two of the most densely populated provinces, where most of the country's major cities are concentrated, makes the two-syllable term "Holland" a convenient short-hand for the more cumbersome "the Netherlands" (not one, however, that all Dutch appreciate).
The word Netherlands, or Dutch Nederland, both come from the expression for "lower land"; the prefix nether- (Dutch neder-), which means "lower" or "under", is also seen in such (admittedly rare) words as netherworld ("underworld"), nethermost ("lowest") and netherward ("downward"). This reference to the country's low-altitude is also reflected in expressions like the "Low Countries", which, on the other hand, refers to a much broader territory than the Netherlands alone; read more about the debatable extent of the Low Countries, which has been used to refer to various parts of anywhere from two to five countries.
As for "Holland", the OED states that this name can be traced to Middle Dutch holtland, "woodland". This is the same holt that we see in place names across the US, UK, Scandinavia, Germany and elsewhere. The Middle Dutch word holt is transformed into hout in modern Dutch, and still, bears a close resemblance to the German word Holz (pronounced hohltz); both variants abound in toponymy.
The dictionary also reports the popular misconception that the name derives from hol land, or "hollow land", another reference to the country's altitude below sea level.
Terms for the People of the Netherlands and Holland
What if we want to refer to inhabitants of the two provinces of North and South Holland? While Dutch has the adjective hollands - "of or from Holland" - we have no modern word to express the same notion; we have to resort to a more roundabout expression to refer to the people of Holland. The word Hollandic exists but is chiefly restricted to specialized academic use, while the word Hollandish is sadly obsolete. The phrase "of or from Holland" is the default expression.
But the most unusual of all is the term Dutch to express "of or from the Netherlands". Why not Netherlandish and/or Netherlanders, for example? (The Dutch themselves use the terms Nederlands as the adjective for "Dutch", and Nederlanders specifically to refer to the people of the Netherlands.) Why does it sound so similar to German deutsch? And where do the Pennsylvania Dutch fit into the scheme?
Here too the OED offers a clear answer: the term Dutch is a relic of the common Germanic period, a time before the Germans, Dutch and other Northern Europeans split into different tribes.
At first, the word Dutch simply meant "popular", as in "of the people", as opposed to the learned elite, which used Latin instead of the Germanic vernacular. In the 15th and 16 centuries, the word "Dutch" simultaneously meant both German and Dutch, or "Low German". This sense of the word still survives in the community known as the Pennsylvania Dutch, who first set foot on U.S. soil in the late 17th century. In Germany and the Netherlands, the term "Dutch" - in the form of Dutch duits and German deutsch - later became particularized to the Germans, while the English continued to use "Dutch" to refer to the Germanic people they encountered most frequently - the Dutch of the Netherlands. Hence we have the demonym Dutch for the people of the Netherlands, which, despite popular misconception, is not coextensive with Holland - and no demonym for the people of Holland, unless we want to revive an archaism like Hollandish.
But most Dutch will pardon any earnest visitors who mix up these terms; just don't confuse them with the Danish!