The name "Chicago" is the French rendering of the Miami-Illinois name shikaakwa, meaning “wild leek”. Etymologically, the sound /shikaakwa/ in Miami-Illinois literally means 'striped skunk', and was a reference to wild leek, or the smell of onions. The name was initially applied to the river, but later came to denote what is presently the site of city. The sound Chicago is said[who?] to be the result of a French mis-transcription of the original sound by Louis Hennepin, a Catholic priest, missionary and explorer, who in 1683 first placed the name 'Chicago' on a map.
During the mid-18th century the area was inhabited primarily by Potawatomis, who had taken the place of the Miami and Sauk and Fox peoples. The first permanent settler in Chicago, Haitian Jean Baptiste Pointe du Sable, arrived in the 1770s, married a Potawatomi woman, and founded the area’s first trading post. In 1803 the United States Army built Fort Dearborn, which was destroyed in the 1812 Fort Dearborn massacre. The Ottawa, Ojibwa, and Potawatomi later ceded the land to the United States in the 1816 Treaty of St. Louis. On August 12, 1833, the Town of Chicago was organized with a population of 350. Within seven years it grew to a population of over 4,000. The City of Chicago was incorporated on March 4, 1837
(from wikipedia)