Contrary to misconceptions, folk etymology should not be used to describe an urban legend behind a word or phrase's origin. (The word "history" does not come from "his story"; actually the word "story" comes from "history" (through Latin historia). But this is not folk etymology.)

Folk etymology, also known as popular etymology, in etymology, is when an unfamiliar word is altered through common usage to resemble a superficially similar word or phrase. The Oxford English Dictionary defines it as

the popular perversion of the form of words in order to render it apparently significant

For example, the source of the words "crayfish" and "crawfish" (same thing) comes from the Old High German word krebiz "crab". This became crevice in Old French, which became crevise in Middle English. People started to spell the second syllable as fish, since it was an aquatic animal (though not a fish). Today we call them crayfish or crawfish because of variations in Anglo-Norman pronunciation.

More examples:

Other languages do it too.

For bad spellers, a word which comes by folk etymology is usually easy to spell - that's how its current spelling came about, because it was easier for people to understand.