"religious system revealed by Muhammad," 1816, from Arabic islam, literally "submission" (to the will of God), from root of aslama "he resigned, he surrendered, he submitted," causative conjunction of salima "he was safe," and related to salam "peace."
... Islam is the only major religion, along with Buddhism (if we consider the name of the religion to come from Budd, the Divine Intellect, and not the Buddha), whose name is not related to a person or ethnic group, but to the central idea of the religion. ["The Heart of Islam: Enduring Values for Humanity," Seyyed Hossein Nasr, 2002]
Earlier English names for the faith include Mahometry (late 15c.), Muhammadism (1610s), Islamism (1747), and Ismaelism (c. 1600; see Ismailite). The Ismailites were not numerous in Islam, but among them were the powerful Fatimid dynasty in Egypt and the Assassins, both of which loomed large in European imagination. This use also is in part from Ishmaelite, a name formerly given (especially by Jews) to Arabs, as descendants of Ishmael (q.v.).