The word Nazi was invented by Konrad Heiden in the 20s and was used with a negative connotation. Heiden, a Journalist and Democratic Socialist with Jewish ancestry, created it as a spinoff of the name used for the marxist SDP which was "Sozi". Its also a pun similar to the word for "simpleton" in Austro-Bavarian. It came into usage in other countries after a propaganda push by Jews including Heiden when he was forced to leave after the NSDAP came to power.
To my knowledge is has nothing to do with Ashkenazis.
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Yes. What you say sounds plausible. As for the term having nothing to do with Ashkenazis, I sincerely doubt it. One simply needs to accept the Zionist-Marxist-English-Communist propaganda machine was second to none in both world wars, still is c/- Hollywood, MSNME, online CO Alt. Social Media, it's the last four (five in the plural) letters of the word and the NWO has been an Ashkenazi's agenda from the beginning. Yes, my understanding is, Hitler did attempt to own the term for a short while in an effort to imbue it with the true spirit of his National Socialism but soon realised such an effort was futile, at the least outside Germany, in the face of such a ubiquitous propaganda machine.