Name of Iran
In the Western world, Persia (or its cognates) was historically the common name for Iran. In 1935, Reza Shah asked foreign delegates to use the term Iran (the historical name of the country, used by its native people) in formal correspondence. Since then, in the Western World, the use of the word "Iran" has become more common. This also changed the usage of the names for the Iranian nationality, and the common adjective for citizens of Iran changed from Persian to Iranian. In 1959, the government of Shah Mohammad Reza Pahlavi, Reza Shah Pahlavi's son, announced that both "Persia" and "Iran" could officially be used interchangeably. Nonetheless, the word "Iran" has replaced "Persia" in the common usage.
Etymology of Iran
The term "Iran" derives immediately from Middle Persian Ērān, Pahlavi ʼyrʼn, first attested in an inscription that accompanies the investiture relief of the first Sassanid king Ardashir I at Naqsh-e Rustam. In this inscription, the king's Middle Persian appellation is ardašīr šāhān šāh ērān while in the Parthian language inscription that accompanies the Middle Persian one the king is titled ardašīr šāhān šāh aryān (Pahlavi: ... ʼryʼn) both meaning king of kings of Iranians.
The gentilic ēr- and ary- in ērān/aryān derives from Old Iranian *arya- (Old Persian airya-, Avestan airiia-, etc.), meaning "Aryan," in the sense of "of the Iranians." This term is attested as an ethnic designator in Achaemenid inscriptions and in Zoroastrianism's Avesta tradition,[n 1] and it seems "very likely" that in Ardashir's inscription ērān still retained this meaning, denoting the people rather than the empire.
Notwithstanding this inscriptional use of ērān to refer to the Iranian peoples, the use of ērān to refer to the empire (and the antonymic anērān to refer to the Roman territories) is also attested by the early Sassanid period. Both ērān and anērān appear in 3rd century calendrical text written by Mani. In an inscription of Ardashir's son and immediate successor, Shapur I "apparently includes in Ērān regions such as Armenia and the Caucasus which were not inhabited predominantly by Iranians." In Kartir's inscriptions (written thirty years after Shapur's), the high priest includes the same regions (together with Georgia, Albania, Syria and the Pontus) in his list of provinces of the antonymic Anērān. Ērān also features in the names of the towns founded by Sassanid dynasts, for instance in Ērān-xwarrah-šābuhr "Glory of Ērān (of) Shapur". It also appears in the titles of government officers, such as in Ērān-āmārgar "Accountant-General (of) Ērān" or Ērān-dibirbed "Chief Scribe (of) Ērān".
Etymology of Persia
The Greeks (who tended earlier to use names related to "Median") began in the fifth century BC to use adjectives such as Perses, Persica or Persis for Cyrus the Great's empire (a word meaning "country" being understood). Such words were taken from the Old Persian Pārsa - the name of the people whom Cyrus the Great of the Achaemenid dynasty first ruled (before he inherited or conquered other Iranian Kingdoms) and of whom he was one. Ultimately, it is important to realize that the term "Persian" is an exonym and Iranians never historically referred to Iran by that exonym. The Pars tribe gave its name to the region where they lived (the modern day province is called Fars/Pars) but the province in ancient times was smaller than its current area. In Latin, the name for the whole empire was Persia. While the Iranians knew it as Iran or Iranshahr.
In the later parts of the Bible, where this kingdom is frequently mentioned (Books of Esther, Daniel, Ezra and Nehemiah), it is called "Paras" (Hebrew פרס), or sometimes "Paras u Madai" (פרס ומדי) i.e. "Persia and Media".
The two names in the West
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The exonym Persia was the official name of Iran in the Western world before 1935, but the Iranian people inside their country since the time of Zoroaster (probably circa 1000 BC), or even before, have called their country Arya, Iran, Iranshahr, "Iranzamin" (Land of Iran), "Aryānām" (the equivalent of "Iran" in the proto-Iranian language) or its equivalents. The term "Arya" has been used by the Iranian people, as well as, by the rulers and emperors of Iran, from the time of the Avesta. Evidently from the time of the Sassanids (226–651 CE) Iranians have called it Iran, meaning "the land of Aryans" and Iranshahr. In Middle Persian sources, the name "Arya" and "Iran" is used for the pre-Sassanid Iranian empires as well as the Sassanid empire. As an example, the use of the name "Iran" for Achaemenids in the Middle Persian book of Arda Viraf refers to the invasion of Iran by Alexander the Great in 330 BC. The Proto-Iranian term for Iran is reconstructed as *Aryānām (the genitive plural of the word *Arya) and the Avestan equivalent is Airyanem (as in Airyanem Vaejah). The internal preference for "Iran" was noted in some Western reference books (e.g. the Harmsworth Encyclopaedia, circa 1907, entry for Iran: "The name is now the official designation of Persia.") but for international purposes, "Persia" was the norm.
On 21 March 1935, the ruler of the country, Reza Shah Pahlavi, issued a decree asking foreign delegates to use the term "Iran" in formal correspondence.
To avoid confusion between the two neighboring countries Iran and Iraq, which were both involved in WWII and occupied by the Allies, Winston Churchill requested from the Iranian government during the Teheran Conference for the old and distinct name "Persia to be used by the United Nations [i.e., the Allies] for the duration of the common War." His request was approved immediately by the Iranian Foreign Ministry. The American side, however, continued using "Iran" as it had at the time little involvement in Iraq to cause any such confusion.
In the summer of 1959, following concerns that the native name had, as one politician put it, "turned a known into an unknown," a committee was formed, led by noted scholar Ehsan Yarshater, to consider the issue again. They recommended a reversal of the 1935 decision, and Mohammad Reza Shah approved this. However, the implementation of the proposal was weak, simply allowing "Persia" and "Iran" to be used interchangeably. Nowadays both terms are common; "Persia" mostly in historical and cultural contexts, "Iran" mostly in political contexts.
In recent years most exhibitions of Persian history, culture and art in the world have used the exonym "Persia" (e.g., "Forgotten Empire; Ancient Persia", British Museum; "7000 Years of Persian Art", Vienna, Berlin; and "Persia; Thirty Centuries of Culture and Art", Amsterdam). In 2006, the largest collection of historical maps of Iran, entitled "Historical Maps of Persia", was published in the Netherlands.
Recent history of the debate
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In the 1980s, Professor Ehsan Yarshater (editor of the Encyclopædia Iranica) started to publish articles on this matter (in both English and Persian) in Rahavard Quarterly, Pars Monthly, Iranian Studies Journal, etc. After him, a few Persian scholars and researchers such as Prof. Kazem Abhary, and Prof. Jalal Matini followed the issue. Several times since then, Persian magazines and Web sites have published articles from those who agree or disagree with usage of "Persia" and "Persian" in English.
It is the case in many countries that the country's native name is different from its international name (see Exonym), but for Persians and Iranians this issue has been very controversial. Main points on this matter:
- Persia is the Western name of the country, and Iranians were calling their country "Iran" for over a millennium.
- Persia evokes the old culture and civilization of the country.
- Persia and the name of a province of Iran (viz., "Pars") are from the same root, and may cause confusion.
- The exonym Persia comes from "Pars" but the meaning shifted to refer to the whole country.
- In Western languages, all famous cultural aspects of Iran have been recorded as "Persian" (e.g., Persian carpet, Persian cat, Persian cuisine, Persian melon, Persian pottery, etc.)
There are many Persians (Iranians) and non-Persians in the West who prefer "Persia" and "Persian" as the English names for the country and nationality, similar to the usage of La Perse/persan in French. According to Hooman Majd, the popularity of the term "Persia" among the Persian diaspora stems from the fact that "'Persia' connotes a glorious past they would like to be identified with, while 'Iran' ... says nothing to the world but Islamic fundamentalism." 
- The History of the Idea of Iran, A. Shapur Shahbazi in Birth of the Persian Empire by V. S. Curtis and S. Stewart, 2005, ISBN 1-84511-062-5
- In the Avesta the airiia- are members of the ethnic group of the Avesta-reciters themselves, in contradistinction to the anairiia-, the "non-Aryas". The word also appears four times in Old Persian: One is in the Behistun inscription, where ariya- is the name of a language or script (DB 4.89). The other three instances occur in Darius I's inscription at Naqsh-e Rustam (DNa 14-15), in Darius I's inscription at Susa (DSe 13-14), and in the inscription of Xerxes I at Persepolis (XPh 12-13). In these, the two Achaemenid dynasts describe themselves as pārsa pārsahyā puça ariya ariyaciça "a Persian, son of a Persian, an Ariya, of Ariya origin." "The phrase with ciça, “origin, descendance,” assures that it [i.e. ariya] is an ethnic name wider in meaning than pārsa and not a simple adjectival epithet."
- Yarshater, Ehsan Persia or Iran, Persian or Farsi, Iranian Studies, vol. XXII no. 1 (1989)
- MacKenzie, David Niel (1998). "Ērān, Ērānšahr". Encyclopedia Iranica 8. Costa Mesa: Mazda.
- Schmitt, Rüdiger (1987). "Aryans". Encyclopedia Iranica 2. New York: Routledge & Kegan Paul. pp. 684–687.
- Bailey, Harold Walter (1987). "Arya". Encyclopedia Iranica 2. New York: Routledge & Kegan Paul. pp. 681–683.
- Gignoux, Phillipe (1987). "Anērān". Encyclopedia Iranica 2. New York: Routledge & Kegan Paul. pp. 30–31.
- Liddell and Scott, Lexicon of the Greek Language, Oxford, 1882, p 1205
- Arda Viraf (1:4; 1:5; 1:9; 1:10; 1:12; etc.)
- Hermitage (2007-09-20). ""Persia", Hermitage Amsterdam". Hermitage. Hermitage. Archived from the original on 2007-04-28. Retrieved 2007-05-03. "Persian objects at Hermitage"
- Brill (2006-09-20). "General Maps of Persia 1477 - 1925". Brill website. Brill. Retrieved 2006-05-03. "Iran, or Persia as it was known in the West for most of its long history, has been mapped extensively for centuries but the absence of a good cartobibliography has often deterred scholars of its history and geography from making use of the many detailed maps that were produced. This is now available, prepared by Cyrus Alai who embarked on a lengthy investigation into the old maps of Persia, and visited major map collections and libraries in many countries..."
- Merriam Webster (2008-01-05). "Persian". MW. MW. Retrieved 2008-01-05. "Persian Carpet, Cat, melon..."
- Majd, Hooman, The Ayatollah Begs to Differ : The Paradox of Modern Iran, by Hooman Majd, Doubleday, 2008, p.161