Nowadays, when we call people peasants, we mean they are poor, foolish, dirty, and disenfranchised. What is the etymology and usage history of the word? Did common folks refer to themselves as peasants? Was it a derogatory insult used by the nobility?
A tricky question from the standpoint of English sociohistorical linguistics specifically, as the word "peasant" comes into the language at precisely the end of the medieval period. And it is at precisely the end of the medieval period that the language becomes better equipped to demarcate social class in the sort of way conventionally implied by that word. Simultaneously, the cultural trappings of the Germanic heroic tradition fall away from the language, even while the language falls into disuse, within legal and economic power centres of society itself.
Still, prior to the influx of Norman French vocabulary which came to dominate these areas of the English lexicon as of Late Middle English, the language was not without designations of social rank, even if they were used quite a bit more loosely ("ætheling" being used to mean "noble", for example, in both literal/hereditary and figurative/poetical senses, with sometimes very little clarity regarding which is intended). As for peasants, the relevant term to this particular status (i.e., the lowest order of freemen) would strike me as being ceorl (cognate with modern "churl").
Ceorl is not necessarily used disparagingly, though nor can it be a compliment. When, in The Battle of Maldon, Dunnere speaks as a "simple churl" (unorne ceorl), we are doubtless to take it as meaningful that even a simple churl among them has kept faith, and likewise judge Godric, who has fled, more harshly, for having failed to stand and fight even whilst lesser men did so. So we come away with a rather positive sense of the ceorl's capacity for nobility.
Another notable positive use of ceorl is to be found in Beowulf (line 1591), whereat Hrothgar's companions are described as snottre ceorlas (i.e., wise fellows). One might compare this usage to that of "folks" in modernity. A usage which expresses familiarity and fellowship through laxity of imposed or recognised social rank.
Not a direct answer to OP, but there is an interesting parallel in the word "villain", which originated as an Old French word meaning "rustic" or "farmer".