Why is Salem Called "The Witch City"?

Many people wonder, is there were no witches in 1692, why is Salem called "The Witch City"? Shouldn't we be "The Hysteria City"? It's a horrible thing to say, but instead of a witch flying across the moon on a broomstick, would it not be more appropriate for the symbol for our city to be a lady hanging from a tree?

To understand why real witches are in Salem we first have to understand how we became known as "The Witch City".