She says in the video that it's named for Navajo plying, and that part makes sense. But I don't like "knitting with yarn that's being Navajo-plied on the fly" getting compressed down into "Navajo knitting". It moves the "Navajo" adjective from referring to actual Navajo people to referring to loose chaining. And given how Navajo people are treated, that isn't acceptable to me. (I'm not opposed to the underlying linguistic principle - I completely accept that "Danish" refers to a class of baked goods that has only a tenuous connection to Denmark, for example. And of course the Danish baked goods are called wienerbrød - Vienna bread.)

I don't know if Navajo people knit and if they do anything different when they do. The only hit I could find doesn't seem to mention knitting in the actual text.