The British armed forces at that time had a marching song "Green grow the rushes, OH", and this led the locals to call the Britons "Los Gringos". Nowadays, the term is more often applied to US and Canadian citizens.
The Spanish used it correctly to distinguish themselves from other white people.It does not mean Blonde person. The spanish used it to refer to White people with simliar complexion like those of southern europeans to distinguish themselves from them.Since they don't run with the spanish but are similar complexion they used the word gringo to notify other spanish decend that this person may look spanish or they may speak spanish well but that they are from from another language or country, derived form the work greek, like they speak some greek language or something strange or wierd or hard to speak, the spanish used the word gringo in meaning that this person is speaking in greek,like when the american use the word greek to describe something they don't understand. Now in this century, the word gringo hasn't been used correctly, Morenos people call anyone gringo that not of dark skin, or a mexican that doesn't speak spanish and there are alot of wrong assuption of the word gringo out there. Gringo was primarily used by the spanish to distinguish thenselves and classifying someone else that looks white but comes from a different country of origin. If A spanish or mexican back in the days where to see a blonde person, then they would just call them guerro(blonde person)or if they see a black person, then they would call him Negro etc, but if they see a white person that looks of spanish decent then they would call him gringo, this word was used to distinguish themselves from from spanish.They are not going to call him Blanco since the word blanco referes to someone of white spanish decent that also has a spanish surname and who's country of origin is of the hispanic coountries, this was a blanco, but a gringo is someone who surname and country of origin was not of spanish decent therefore the spanish would just say, " he's talking greek" meaning some weird language, which they used the word " el gringo"