I recently came across this interesting collection of theories on the origins of the word Huguenot. It appears as an extensive footnote in a biography of Admiral Coligny:
The name Huguenots appears for the first time officially in a royal edict April 5th, 1561. It was after the conspiracy of Amboise that it began to be used commonly in France. Etienne Pasquier says that, eight or nine years before, he had heard it used in Touraine. M. Soldan says that this name, even under its French form Huguenots, was used in Geneva before 1530, and was the equivalent of the German Eidgenossen, confederates, (Bulletin de la Soc. d'hist. du prot. français, 1860, p. 12 and following.)
The origin of the name has been discussed in numberless dissertations (see Le Bulletin, 1858, p. 287; 1859, pp. 13, 122, 266, 378; 1860, p. 12; 1862, p. 328; 1876, p. 388). Menage, in his Dict. hist., article "Huguenots," mentions the various etymologies given to it. Setting aside those which are decidedly fanciful, we may mention the following :—
1st. The Protestants assembled at Tours by the gate of King Hugo (La Place, followed by Popelinière and Davila).
2nd. The people of Tours believed in an evil spirit which appeared in the night, and was called King Huguet or Hugo. They gave this name to the Protestants who met at night. (Régnier, La Planche, Beza, De Thou.)
3rd. In Touraine small pieces of money, not worth a farthing, were called huguenots; the name was derived from Hugh Capet. It came to be used as a term of contempt. "So and so is not worth a huguenot " (Castelnau).
4th. The Guises, basing their claims on a direct descent from Charlemagne, the opposite party maintained the rights of the Capetians, and were thus called Huguenots, as the party of Hugh Capet. This explanation has against it the objection that the name Huguenots was from the first in France a term of reproach (the use of it is forbidden in the above-mentioned edict of 1561), and it is hardly to be supposed that the Guise party, who were at the time of the conspiracy of Amboise the protectors of Francis II, would have used as a term of reproach for the Protestants a name which implied their loyalty to the king. It is easy, on the other hand, to see why the Protestants should have been glad to assign such an origin to the name. We may mention here a singular fact which has not, as far as we know, been alluded to elsewhere. When, after the failure of the conspiracy of Amboise, Maligny tried to take possession of Lyon, the watchword of the Protestant conspirators was "Christ and Capet." The choice of the name (Hugh Capet) was evidently made with a view to mark their attachment to the reigning dynasty.
5th. Lastly at Geneva, those who opposed the Duke of Savoy and sought the alliance of Berne and Fribourg were called Eidgenossen, Eidgnots, huguenots (the h originally mute). The word came afterwards to designate the Protestants in opposition to the partisans of Savoy, who were called Mameluks. When we think of the close relations that existed between Geneva and the Protestants of France, it will not seem in any way strange that the name should have passed into France, and been used in the valley of the Loire, where the Churches were very numerous. At the time of the conspiracy of Amboise, the Guise party took it up eagerly as the synonym of the conspirators; it is used in this way in a pamphlet issued by them in 1562. As early as 1560 the Guises accused the conspirators of Amboise of seeking to overthrow the king, and to form themselves into independent confederate states like the Swiss cantons (see La Planche, passim). This explanation, adopted by Mignet, is supported by M. Soldan on very strong evidence. On the other side it may be urged that if the name originated in Geneva, Theodore Beza would not have been ignorant of its etymology, and would have adopted it himself. But it has yet to be ascertained whether the page of the Hist. ecclés., relating to the word Huguenot is by Beza himself, or whether it is one of the many documents collected in his name.
For our own part, we believe that the name Huguenots was at first an opprobrious epithet to designate those who had become confederates after the Swiss fashion; that the French Protestants early gave it an etymological derivation from Hugh Capet, in order to denote their attachment to the king. La Planche, in a passage that has been too much overlooked (p, 95, Coll. i., edit. Mennechet), says that the conspirators of Amboise, in the remonstrance published by them in 1560, gave to the word Huguenots its etymological derivation from Hugh Capet.
We leave the reader to decide for himself, simply observing that in reference to these popular appellations the true is not always that which seems true on the surface. The name Huguenot lost its opprobrious character in the seventeenth century. Balzac uses it as an entirely honourable epithet.