republic lying to the south of the U.S., from Spanish, from Nahuatl (Aztecan) mexihco, which originally referred to the Valley of Mexico around present-day Mexico City. It became the name of the nation (formerly New Spain) upon independence from Spain in 1821.

The etymology of this is opaque. Because of the difference in vowel length, it cannot be derived from ME-TL 'maguey.' The sequence XIH also differs in vowel length from XIC-TLI 'navel,' which has been proposed as a component element. The final element is locative -C(O). [Kartunnen]

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Definitions of Mexico from WordNet

Mexico (n.)
a republic in southern North America; became independent from Spain in 1810;
Synonyms: United Mexican States