The term ‘Jew‘ originates from the name Judah, one of the twelve tribes of ancient Israel. The first biblical usage of the term appears in 2 Kings 16:6. According to Genesis, Judah (Yehudah) was the fourth son of Jacob, and his descendants formed the Tribe of Judah during the Exodus.
Initially, the name Judah referred to the tribe and its allocated territory in Canaan. After the united Kingdom of Israel split, the name designated the southern kingdom of Judah, comprising the tribes of Judah, Benjamin, parts of Simeon, and some Levite cities.
Following the destruction of the northern kingdom of Israel (Samaria), the kingdom of Judah became the sole Jewish state, and the term ‘y’hudi‘ encompassed all Israelites. By the time the word ‘Jew’ first appeared in writing (in the book of Esther), its meaning had expanded to include both descendants of Israelites and converts to the Jewish religion.
Reference: 2 Kings 16:6, Esther 2:5