Several versions are in competition to explain the origin of the word “Peru”. The first one make a link between the actual name and the Pre-Inca civilization “Viru”, located at the north of Peru. So, when the first European explorers arrived and asked what this place was, the native peoples told them “Viru”, which changes into “Peru”.
The other version, more accepted communally, is this one; Francisco Pizarro and his men had to put in their ship in the actual Panama, already conquered, before continuing their road to the south. In the Bay of Saint-Michel, at the south of Panama and to the limit of lands already known by the Spanish at this period, there were a local chief named “Biru”. When the Spanish asked what was the name of this land, they answered them there were “Biru”’s lands. And by extension, Pizarro continued to name every land situated at the south of Panama isthmus “Biru” and then “Peru”.
Only one thing is clear, the name of Peru is definitely adopted with an official Spanish document untitled “Capitulation of Toledo” in 1529. From this document, the King of Spain gave to Pizarro the title of “Governor of the lands and provinces of Peru and the city of Tumbes”.
At this period, and until the moment of the independence, the name of Peru was associated to the Viceroyalty of Peru, which covered almost the whole South America, from the Isthmus of Panama to Patagonia, apart from Brazil Portuguese and Venezuela that depended of the Viceroyalty of New Spain (Mexico and Central America).
It was during the independence that this territory known as “Peru” became smaller and reduced more or less to its actual territory.