A German mapmaker had read Amerigo Vespucci's account of his trip to South America and thought that he had seen the continent before Columbus (actually Columbus seems to have seen the South American continent before Vespucci), and the mapmaker then proposed America as the name for South America (the feminine form of the Latin version of Amerigo's name).
Vespucci was just a passenger on the ship--he wasn't even in command of the expedition.