It was the work of a couple of cartographers:
We call ourselves Americans today because of the map’s makers, Martin Waldseemüller and Mathias Ringmann, young clerics in the cathedral village of St.-Dié, France. By incorporating early New World discoveries, their map reached beyond the canonical descriptions of Old World geography handed down from Ptolemy in the second century. On a lower stretch of the southern continent, the mapmakers inscribed the name “America” in the mistaken belief that Amerigo Vespucci, not Columbus, deserved credit for first sighting a part of that continent, South America.
Or possibly they favored Vespucci because he held more firmly to the growing consensus that this was indeed a New World, not the Indies (as Columbus so wanted to believe), and because he wrote more colorfully than Columbus about the people he encountered.