It is probably derived from the verb
to crack used in the sense "to boast" (as in
not what it's cracked up to be) in
Elizabethan times, documented in
Shakespeare's King John (1595): "What cracker is this same that deafs our ears with this abundance of superfluous breath?"
[4][5] This sense of
cracker, used to describe loud
braggarts, persisted especially in
Hiberno-English and it, and its Gaelicized spelling
craic, are still in use in
Ireland,
Scotland and
Northern England.
[6] This explanation is given in the earliest recorded reference to the term in the specific meaning under discussion here, in a letter dated 27 June 1766 by one G. Cochrane (in some sources identified as being addressed to the
Earl of Dartmouth):
"I should explain to your Lordship what is meant by Crackers; a name they have got from being great boasters; they are a lawless set of rascalls on the frontiers of Virginia, Maryland, the Carolinas, and Georgia, who often change their places of abode."
[3]