The first thing that pops up is, "Bluegrass refers to several species of grasses of the genus Poa (with the most famous being the Kentucky bluegrass.)" Clicking the Kentucky bluegrass link takes you to the Poa listing, so I can understand a little confusion at first. The next one is the "Bluegrass region, a region of the United States centered in Kentucky," and might I add, it doesn't go much beyond the state of Kentucky since it's surrounded on the north, east, and west sides by a river. Then we have, "Bluegrass music, a form of American roots music." You know, I almost understand the common oversight, since this article states it's a form of American roots music (50 states and 14 fucking territories), which is a bit worse than saying, and I quote, "Bluegrass was inspired by the music of Appalachia," (13 fucking states and more than half of the goddamn east coast,) and the article more or less buries the origins reference without ever mentioning an actual location. However, it does finally agree that it was more than likely named after The Blue Grass Boys, Bill Monroe's band, which formed in 1939.
As you may have guessed, the next entry in the grand ol' Wikipedia is none other than, "The Blue Grass Boys, the band led by Bill Monroe that defined the Bluegrass genre." Sadly, clicking it goes straight to Bill Monroe (the Father of Bluegrass, born in the state of Kentucky) and gives little coverage of the others members at the time. Let's see, you had, "banjo prodigy Earl Scruggs (NC), singer-guitarist Lester Flatt (TN), fiddler Chubby Wise, and bassist Howard Watts (both from FL) - sometimes called "the original bluegrass band."
But before I continue, I'd like to return to the previous genre entry, where Ralph Stanley of the Stanley Brothers, pretty much the second biggest Bluegrass band, ever, says the term came from deciding on the name of a music festival. "It was decided that since Bill was the oldest man, and was from the bluegrass state of Kentucky and he had the Blue Grass Boys, it would be called 'bluegrass." Well, if that doesn't make sense to me and the entire world, I don't know what would. And of course, it's quickly followed by someone adding, "The Oxford Companion to Music suggests an etymology related to the "Blue Mountains [sic] of Virginia." Thanks a lot, dickhead, since Ralph Stanley's from VA, I couldn't have guessed. Also, your vague and pointless entry often gets people confused and they credit the creation of the name to the Blue Ridge Mountains. When I think of blue mountains, I think of blue grass. And when I think of a Ford Mustang, I think of orange juice. This is why I hate people.
Moving forward, the last official entry under bluegrass is, "Bluegrass & Backroads, a television show about people and places in the Bluegrass region." Also known as Kentucky Farm Bureau's Bluegrass & Backroads, produced by Kentucky Farm Bureau Federation and Kentucky Farm Bureau Insurance Companies, based in Louisville, Kentucky, and you can watch it on Kentucky Educational Television.
There are a few Other uses before we go. "Blue Grass, Iowa, a small city" no one has ever heard of, "Blue Grass, Virginia," an even smaller city no one has ever heard of and wasn't even named that until 1950, the "Blue Grass Army Depot in Richmond, Kentucky," which, while Richmond isn't a big secret, mentioning a chemical weapons stockpile will probably get my blog flagged by the NSA, again, and we have the "Bluegrass (Sirius)" radio station that was merged with one on XM, and "Bluegrass (train), a passenger train of the Monon Railroad," that I know nothing about and it doesn't even have a damn entry, so why is it listed?
In short, bluegrass music gets its origins from the name of a region in Kentucky.