A fascinating factoid:
Nazi is obviously a short form of National socialist, or Nationalsozialist to be precise, just as Sozi is a short form of Sozialist. But the word has a much more interesting story than that.
Long before the rise of the NSDAP in the 1920s, people in at least southern Germany could be called Nazi if they were named Ignatz, or came from Austria or Bohemia (where they apparently had lots of Ignatzes); it was supposedly also used as a generic name for soldiers of Austria-Hungary, like the German Fritz or Russian Ivan. It had to be used with caution between friends, though, since it could also mean “idiot” or “clumsy oaf”. That’s how it found it’s way into politics; the fact that Adolf came from Austria (not Bohemia, though) could have made the pun even better. […]
An example of pre-hitlerian use of Nazi in southern Germany can be found in a “Bayerische Komödie in 4 Akten”: Der Schusternazi, “the shoemaker nazi”, by Ludwig Thoma in 1905.
Via bayard at Wordorigins.org, where Oecolampadius points out that the OED agrees: “The term was originally used by opponents of the National Socialist German Workers’ Party and may have been influenced by Bavarian Nazi, a familiar form of the proper name Ignatius and used to refer to or characterize an awkward or clumsy person.” (Odd that they use the Latin form of the name.)