
The word "kangaroo" is commonly held to be an Aboriginal word, meaning the same as the modern word for the well-known marsupial. However, the Aborigines of the Sydney area, at the time of the first English settlement there, believed it was an English word meaning "animal". They would point to a sheep and say "kangaroo" (Watkin Tench "1788"). Unlike words such as "wombat" or "boomerang", it was not from their language.
According to Etymonline it is "supposedly an aborigine (i.e. Aborigine) word from northeast Queensland, Australia, usually said to be unknown now in any native language."
I would like to propose another explanation of its origins.
The Aborigines learnt the word "animal" from the English who were
mostly of poor urban origins. In
Cockney English it would have been pronounced a-na-moo. Small sound shifts to adapt to Aboriginal speech norms:
give the pronunciation ka-nga-moo. The
shift from moo to roo is minimal in the last syllable. The word
ka-nga-roo is the word a-ni-mal rendered from English. It then returned
to English as the word for one particular animal as if it were an
Aboriginal word.
The supposed origin (Etymonline) in Queensland is unlikely as the word was already used in Sydney at the time of the first English colonisation. Often the best approach when trying to understand indigenous people is to believe what they say as Jeremy Narby suggested. If they say it is an English word for "animal", this should be take as a plausible explanation.
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