Limey is a predominantly North American slang nickname for British people, originally referring to their sailors.
The term is thought to have originated in the 1850s as lime-juicer, and was later shortened to "limey". It was originally used as a derogatory word for sailors in the Royal Navy, because of the Royal Navy's practice since the beginning of the 19th century of adding lemon juice to the sailors' daily ration of watered-down rum (known as grog), in order to prevent scurvy. Initially, it was lemon juice that was used as the additive to grog on the British Royal Navy ships. At the time, the terms "lemon" and "lime" were used interchangeably to refer to citrus fruits. The vitamin C or ascorbic acid in citrus fruits, helped make these sailors some of the healthiest of the time as it prevented scurvy. The British Navy eventually switched from lemons (imported from Europe) to limes (grown in British colonies), not realizing that limes did not contain sufficient Vitamin C to prevent the disease.
Eventually, the term lost its naval connection and was used to denote British people in general. In the 1880s, it was used to refer to British immigrants in Australia, New Zealand and South Africa. Although the term may have been used earlier in the U.S. Navy as a slang word for a British sailor or a British warship, such usage was not documented until 1918. By 1925, the usage of limey in American English had been extended to mean any British person, and the term was so commonly known that it was featured in American newspaper headlines.