“My sixth-grade Spanish teacher claimed that the word was coined by Central and South Americans during the U.S. military occupation of various Latin American countries. According to him, the word refers to the color of the U.S. dollar.
In all three of these stories, the message is the same: Mexicans and Latin Americans came up with word because they wanted the U.S. military to leave: ‘Green, go home!’
But the 1786 Castilian Dictionary by Esteban Terreros y Pando traces the use of the word back to 1700s Spain. Spaniards used it as a name for people who could not speak Spanish, he said, or who spoke Spanish with a heavy accent.”