Does the "German" in "German chocolate cake" refer to the chocolate or the cake? A friend insists that the "chocolate" is the German part of German chocolate cake, the evidence being that there are no palm trees in Germany (for the coconut frosting). Is this correct?
A Baker's (now owned by kraft foods) employee named Sam German developed a chocolate recipe that was sweeter than semi-sweet chocolate, as well as containing a blend of chocolate liquor, sugar, cocoa butter, flavorings, and lecithin. Baker's honored Sam by naming the chocolate that he created Baker's German's Chocolate. 

In 1957 the recipe was published in a Dallas newspaper, although nobody is sure exactly when the recipe was originally created. Generally Foods - who had bought the brand - noticed that alot of people liked the recipe and started a PR campaign for German's Chocolate using the recipe. They started sending it to newspapers all over - and people liked it. At some point the "'s" got dropped from the name, introducing all of the confusion we have about the origin of the cake today.

References:
http://en.wikipedia.org/wiki/German_chocolate_cake
http://en.wikipedia.org/wiki/Walter_Baker_%26_Company 
http://www.joyofbaking.com/GermanChocolate.html