domasla and Cherry got the point about the origins of the word "german" already. About the time that the word "diudisc" came into being, there was no "Germany" but many small nations such as Alemanni, Saxons, Teutons, etc. The surrounding countries used their names to name what later would become "Germany". That's why Germans are "Allemands", "Tedeschi", "Nijemci", "Saksa(laiset)", "Tysker" or "Germans" in different countries.

Deutsch" has its origin in the Old High German word "diutisc" ( in Middle High German tiutsch or diutsch ) meaning "the language of the people" (as opposed to Latin). In the 10th and 11th century Diutisc and tiutsch were used as a name for the germanic languages spoken on the continent. Even dutch dialects were called “Deutsch”. The Englisch word Dutch is a relict of those days.

Theodiscus (diutisc /theuda) originally means "people". The language of the ordinary germanic (not "german") people. Not Latin. http://de.wikipedia.org/wiki/Deutsch_%28Etymologie%29 http://en.wikipedia.org/wiki/Theodiscus