To give something to someone and then take it back.
As in, giving some unwanted land to the Native Americans (or Indians), finding that the land contains gold, and then taking it back.
At least, that's what I was taught. None of the other definitions on here seem to follow this route, but surely my explanation makes the most sense?!
Jade: Here, you can have this cake, I don't like nuts.
Leah: Cheers. Hey, they're not nuts, they're chocolate chips. Mmmm...
Jade: Can I have it back? It was mine first.
Leah: Fucking Indian giver...