It was initially called "LiveScript", but since Java applets were really popular at the time of its creation, they went with "JavaScript" instead to get attention.

It was partly marketing, part to appease Sun Microsystems at the time, whose Java Applet product were supposed to be the true unifying web platform. Having a built-in scripting language in the browser annoyed a great many important people, who felt it undercut the importance of Java. Calling it Javascript gave the illusion that it was a smaller subset of Java, (even though it clearly isn't), while also benefiting from the more recognizable/marketable name 'Java', which was the new hottness.