Pbs.org recently posted an article that included this:

[A] strange old phrase, “Indian giver.” Surely the phrase bespeaks a problem of cross-cultural understanding. The earliest record of this expression dates to Thomas Hutchinson’s 1764 history of the Massachusetts Bay Colony where a footnote explains that an Indian gift “is … a present for which an equivalent return is expected.” We still use this, of course, and in an even broader sense, we call those friends “Indian givers” who are so uncivilized as to ask us to return the gifts they’ve given.

Word Detective agrees, though the site dates the phrase to the early 19th century.  The Phrase Finder cites 1765 for Hutchinson’s history.

Straightdope.com refers back to the PBS source and wanders into politics – Cecil is always fun.