I hear this phrase used to describe people who are sort of nordic, but where does it come from?
Scandihoovian dates from the late 19th century after hundreds of thousands of people emigrated to North America from Scandinavia and the Nordic countries. Many settled in the north and applied their logging expertise from their forested homelands. According to the US Library of Congress:
The Oxford English Dictionary says it's chiefly North American slang and an arbitrary jocular alteration of Scandinavian. Their earliest citation is 1929:
The Dictionary of American Regional English says it was circulating as early as 1901, but I've found some antedatings.
The earliest example I found refers to tobacco, in a description of "Enjoyment in a Lumber Camp" in Michigan and Wisconsin towards Lake Superior ("by Bill Nye, in Denver Opinion"), published in The Iola Register (May 23, 1884, Iola, Kan.):
The earliest I found referring to a person is in testimony in court reports regarding a charge of assault with intent to murder. First the The Deseret Evening News (Sep 10, 1889, Salt Lake City, Utah):
It was similarly reported in The Salt Lake Herald (September 11, 1889, Salt Lake City, Utah) in a report titled "Held For Battery":
I don't think Holland was calling Laehr by the nickname "Fritz", but rather he's saying Fritz Riesen (present, and "at whose former place of business the fracas occurred") is also a Scandihoovian. Both Fred Laehr and Fritz Riesen sound like German names and that may have added to the insult: using a disparaging nickname for Scandinavians for people who aren't even Scandinavian.
Edit: Via ADS-L comes an earlier example:
Finally, World Wide Words mentions Scandinoovian as an example of ooglification:
Comment on MW:
Found on the Forums:
According to Norwegians and Swedes in the United States: Friends and Neighbors, the term originates from northwestern USA in the early 20th Century:
Based on this, I suspect that the term imitates the Scandinavian-American accent heard in those regions (e.g., as spoken in Fargo).