The name Persia is actually a Latin derivation used mainly by Westerners to describe the region roughly equivalent to that of present day Iran.
In truth during the rise and fall of the Persian Empire the land was known to its people as 'Aryanam', which is equated to the current “Iran” in the proto -Iranian language.
During the reign of the Sassanids it became Eran – meaning "land of the Aryans".
Aryan by definition meant anyone speaking any of the Indo-European languages, including that of the Iranians. Unfortunately, with the rise of Hitler in the 1930’s, "Aryan" came to be associated with the Nazi definition: being of Non-Jewish Caucasian descent, especially the blue eyed, blond haired Nordic races that Hitler himself favored and hoped to make a master race.
Iran VS Persia:
In fact, in 1935, Dr Hjalmar Schacht, the Nazi Economics minister noted the Aryan origin of the Persians and encouraged the Persian Reza Shah Pahlavi to ask foreign delegates to use the term Iran, "land of Aryans" instead of Persia.
As the New York Times explained at the time, "At the suggestion of the Persian Legation in Berlin, the Tehran government, on the Persian New Year, March 21, 1935, substituted Iran for Persia as the official name of the country.
Defenders of the name change, point to its use by the Greek historians citing that "Aryan" means "noble". Many also felt that calling something or someone Persian was dated and somewhat restrictive.
There was a need to unify the people of this land under one nation, Iran, thus encompassing the other ethnicities, such as the Kurds or Turks, residing in former Persia. In its decision it was influenced by the Nazi revival of interest in the various Aryan races, cradled in ancient Persia. As the Ministry of Foreign Affairs set forth in its memorandum on the subject, 'Perse,' the French designation of Persia, connoted the weakness and tottering independence of the country in the nineteenth century, when it was the chessboard of European imperialistic rivalry.
'Iran,' by contrast, conjured up memories of the vigor and splendor of its historic past."
This change, however, evoked much opposition and confusion as Persians felt that the term damaged their cultural heritage and aligned them with pro Nazi sentiment.
Additionally, all too often Iran was confused with their neighboring Arab state of Iraq, so much that during World War II, Winston Churchill called to enforce continuation of the term of Persia when dealing with political documentation. Even today, in an effort to separate themselves, those opposed to the current government in Iran continue to refer to themselves as Persian.
In 1959, the work of Professor Ehsan Yarshater, editor of Encyclopedia Iranica, propagated a move to use Persia and Iran interchangeably which was approved by Mohammad Reza Shah.