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Bavarian is the English name for the residents of any of the historical entities known as Bavaria (German Bayern).
Bavarian is also the adjective for things related to Bavaria.
Bavaria itself derived its name from the Germanic tribe known as the Baioari or Bajuwarii.
Because the same name has referred at different times to the inhabitants of several different, although related, political entities, it should be remembered that the term's meaning may vary slightly, depending upon the period concerned.
Side note: Because of King Ludwig I's passon for everything hellenic, the German name for Bavaria today is spelled "Bayern", while the language (some argue dialect) spoken there has retained its original spelling "Bairisch" - note the "i" versus the "hellenic" "y". Because of that, it is "bayerisch" people, but the "bairisch" language.
Another side note: In Upper and Lower Bavaria is the predominant spoken language. Everyone there can read, write and understand High German (called "written German" in those areas) but, as a phenomenon, many people, especially in rural areas, don't speak any High German at all. So in these areas we find a special kind of bilingualism. High German is the "written German" or "written Language" that everyone knows to write and read but Bavarian is the commonly (and in very many cases only) spoken language (or dialect).