The word spoofing was popularized in the air-force. when a fighter jet notices an enemy missile (air-to-air or surface-to-air) coming, the pilot will fire off a flair or chaff (depending on whether or not the missile is a heat seeking or radar guided) to spoof (trick) the missile into going after the wrong target.
IP spoofing works the same way, and is commonly used by computer hackers because it's easy to implement, it takes advantage of someone else's trust relationship, it makes it harder to identify the source of the true attack, and it focuses attention away to an innocent 3rd party.
