Simply put, "Dutch courage" is the same thing as courage in a bottle, liquid courage, courage enhancer or even stupidity enhancer, depending on how you look at it. Usually specific to gin, which popped out of the Netherlands alcoholic womb in the 17th century.
The well versed noders out there will recognize that Dutch courage is just another entry in the list of Dutch insults. Consider the following:
- Dutch nightingale: A frog.
- Dutch headache: A hangover.
- Dutch defense: A retreat (see French Military Policy).
- Dutch treat or Going Dutch: To split the bill equally between all individuals, usually for a meal.
- Dutch concert: A drunken uproar or an event where everyone sings a different tune or song.
- Dutch courage: Alcohol, especially when consumed before a battle.
- Dutch cap: A diaphragm.
- Dutch wife: A sex doll (varies, but we're going with this one).
Why all the Dutch hostility? Probably because they're wankers.
No, I don't know that for a fact, I've never met any of you fine Dutchites. The actual basis comes from the English and Dutch tension over trying to rule the world at the same time. Back in the days of yore, England and the Netherlands were establishing world wide empires simultaneously. There were plenty of armed conflicts between the countries over time including the First, Second and Third Anglo-Dutch War as well as several confrontations between African colonial establishments.
Since we all grew up on the Queen's English I guess our tongues inherited a little Dutch resentment.