And I am not talking about any sort of ignorance by modern people, I'm referring to the fact that it seems like a mistake that would have been corrected a hundred years ago and barely repeated by people today.

edit: this has been answered by /u/Snapshot52 here: https://www.reddit.com/r/AskHistorians/comments/5amzma/why_is_it_that_the_term_indians_is_still_used_and/d9ink6s/