Here's a quote from "Brewer's Dictionary of Names - People & Places & Things": -----
Ireland: The western island and independent republic of the British Isles has a name that means "EIRE land", the first word here being the Irish name for the country. It may itself mean "western land" from a root word related to Gaelic 'iar' "west", although some sources see it as a blend of Gaelic 'i' "island" and 'iarunn' "iron". The Latin name of Ireland, 'Hibernia', evolved as a corruption of 'Iverna', itself representing Old Celtic 'Iveriu'. This gave both the poetic name of Ireland, 'Erin', and the name for the land in other Celtic languages, such as Welsh 'Iwerddon', Breton 'Iwerzhon' and Cornish 'Ywerdhon'. -----
In an Online Etymology Dictionary I found another theory:
----- Irish: c.1205, Irisce, from stem of O.E. Iras "inhabitant of Ireland," from O.N. irar, ult. from O.Ir. Eriu "Erin." Meaning "temper, passion" is 1834, Amer.Eng. (first attested in writings of Davy Crockett), from the legendary pugnacity of Irish people. Irish-American is from 1832; Irish coffee is from 1950. Wild Irish (1399) originally were those not under English rule; Black Irish in ref. to those of Mediterranean appearance is from 1888.