The origin of the the name California has never been determined. But one theory, which has gained more attention recently, is that it is named from Calafia, a fictional black queen, from an early 16th century book by a Castilian author.
Calafia rules over an island kingdom of black women, but is entirely fictional.
My feeling is that it started as an enterprising slave lady taking a derogatory term and completely turning it on its head and totally rocking it, which is beyond admirably sassy. I think it has moved on since then, though, and has turned into a phenomenon similar to bridezillas (who are queen for a day) only 24/7 365 days a year.