I get asked that question all the time. Well, North Carolina is “The Tar Heel State” so everyone who lives here is a Tar Heel. And it’s also the nickname for the sports teams of the University of North Carolina at Chapel Hill.
There are several different legends about the origin of the name, and I usually go with the one that dates back to the Revolutionary War. In colonial times, one of North Carolina’s major products was tar from all the pine forests across the state. Some people think that originally "Tar Heels" was an insult, something along the lines of "redneck" or "white trash."
Then the war began and supposedly the troops from North Carolina were very brave (or foolhardy) and refused to retreat or back down, and some famous general said, “Those boys from North Carolina must have tar on their heels” to compliment their bravery. And after that, being called a "Tar Heel" was positive rather than insulting.
UNC-Chapel Hill (founded in 1789) is the oldest public university in the U.S. and “Tar Heels” became the nickname for all the sports teams at that school. So while every resident of NC is a Tar Heel, not every resident is a Tar Heel fan (there are other universities in the state and some people chose to pull for those other teams, though I don't understand why).
But here’s what really confuses people. Our mascot is a ram named Ramses. But we are NOT the UNC Rams, we’re the UNC Tar Heels. Even I don’t completely understand that. Maybe it was just too hard to make a furry suit that looks like a foot?
Our rivals like to point out that a Tar Heel is, in reality, nothing but a dirty foot, and they are right. But I love the name…there are lots of teams called lions or tigers or bears, but ours is unique.
The rivals also like to note that Carolina Blue is a wimpy color more suited to baby nurseries than to athletics, but that’s just sour grapes on their part. ;)