Follow up question.

Is this similar how we got our names for native american tribes?

To put it simply, we know only what had been either preserved in writing or carried until present day in oral tradition. This is why some names of the peoples that no longer exist, usually after being assimilated into other ethnic groups or simply going extinct are known only from the writings of other peoples, especially if the former did not know writing and thus most if not all such demonyms and ethnonyms are by necessity exonyms, i.e. names used by others to denote a specific people or dwellers of a given place. Of course, the information recorded by ancient historians and other writers could have been of varying quality. To invoke one of the most popular Latin passages: '[...]qui ipsorunt lingua Celtae, nostra Galli appellantur' ('[..]them, who call themselves Celts and whom we call the Gauls'), even though the word 'Celt' is now largely considered a Greek exonym coined by Hecataeus of Miletus in 5th century BC.

Sometimes the etymology can be very convoluted and given that the first written accounts come from the time when literacy was way less popular than in modern times, some origins were lost in time and names have undergone a lot of changes. For example, people known in English as 'Hungarians' are known in German as 'Ungarn' that gave the basis for English and most Slavic version of that ethnonym. This word most likely stems from the word 'Hun' or one of the Hunnic peoples, On(o)gurs, even though Ugric Hungarians have very little in common with Asiatic Huns what is reflected by their endonym 'Magyarok'. The confusion most likely comes from the fact that in 5th century AD Magyars, Huns and Protobulgarians were living in roughly the same area. Now the history of all the peoples is relatively well known, but the misleading names remained. It should be noted though, that this is apparently not a bone of contention, given that generally few people are aware of the origins of the ethnonyms leading to prevalence of traditional names. Sometimes it changes however. To continue the above example, In Czech and Slovakian, Hungarians are now called 'Maďaři/Madari' (what corresponds with the Hungarian endonym) even though in XIX century they were called 'Uhři/Uhri' (from German 'Ungarn'). But the country itself is still called 'Uhersko', go figure.

Even more interesting is relatively modern shift that happened in Prussia. Today, the term 'Prussian' is deeply associated with Germans. But until late Middle Ages, Prussians were Baltic people (some suggest they may be related to Frisians) that later became a part of Greater Duchy of Lithuania and gave name to the territory they previously inhabited. This territory, in the course of Polish-Teutonic War and further emancipation when Polish power waned became a part of Hohenzollern Prussia and later the German Empire, with no ties to the original Baltic inhabitants. In 18th century the term 'Prussian' solely meant an inhabitant of the easternmost of the German states. Similar thing happened in Bulgaria, now predominantly Slavic country, even though Bulgars who gave the name to the country were Turkic people.

It should also be noted that varied ethnonyms are still commonly used. One of the best examples in the name of the nation that is known in English as 'Germans' (from Latin name 'Germanes'). In Romance languages they are called by a variant of a name 'Allemanes' (fr. Allemands, spa. Allemanes), in Central and Eastern European languages (Slavic and Ugro-Finnish Hungarian) they are known by a name of disputed origin, sometimes associated with the name for 'mute' or the name of Nemetes people (pol. Niemcy, cz. Němci, srb. Немци, hun. Nemetek). In Baltic languages the oppsite etymology is proposed, as the local name for Germans (lit. Vokiečiai, lat. Vācieši) may stem from IE 'wackis' (shout, scream). In northern Ugro-Finnic languages they are known by a variant of the name 'Saxon' (fin. Saksalaiset, est. Sakslased). In Scandinavian languages they are known by a variant of a name 'Tysken' (dun. Tyskere, swe. Tyskarna) while in Italian they are called 'Tedeschi' that is similar to a name Germans called themselves, i.e. 'Deutscher'.

Is it similar how we got names for Native American people? It depends. Contacts between Native Americans and European colonists (this also applies to the Central and Southern American peoples) began in the time when literacy was already popular and large number of the peoples exist to this day, making it possible to record the endonyms of the particular peoples. But, of course, there is always a language barrier and most of the people making contacts were not skilled linguists possessing modern knowledge and thus they tried to render the notes as close to the origin as possible, but given the basic differences between the language groups, the results were... more or less accurate. A thus, among relatively well rendered names as Seneca, Cayuga, Onondaga or Mohican, which are all quite good English approximation of the original autonyms ('Cherokee' is a borderline example, as it bears some resemblance to original 'Tsalagi'), we have 'Iroquis' that has a rather uncertain origin.

And, of course, the sequence various people were contacted could have been of import, as hostile groups could refer to their enemies by derogatory names that were recorded by Europeans in good faith as legitimate ethnonyms, what is considered to be the case of the exonym 'Sioux', that is considered either a contraction of the term transcribed in French as 'Nadoussioux' given by Ojibwe people in whose language the term means 'rattlesnakes' or from Algonqinian 'those who speak foreign language.