It can't be said for certain where the term "Hoosier" came from, but there are plenty of stories about it. (It's pronounced "who-zure," by the way.)
Some say the word goes back to the greeting people used in pioneer Indiana -- "Who's 'yere!" meaning "Who's there?" Some hold that it came from "husher" -- a strong person who can quiet -- or hush -- others.
Still another story says the term is derived from Sam Hoosier, a contractor on the canals whose workers proudly called themselves "Hoosier men."
The most famous "Hoosier men" today, of course, are the Hurryin' Hoosiers of Indiana University basketball.