Huh. And here I'd always thought it was named after the Mason-Dixon line, which everybody thinks separates the North from the South. (Though it doesn't, unless you count Maryland as a Southern state.)
Maryland used to be a very Southern state, with slaves and a Southern outlook that Lincoln just barely kept from seceding by revoking various constitutional rights.
That "dix dollars" story sounds apocryphal to me, but then again, I may have just been assuming all along that it came from the Mason-Dixon line. But "below the Macie-Dixie" line is certainly something I've heard, and it's not too much of a stretch to get to "Dixie" from that... but WP is never wrong, and it gives that story first out of three, with an even more suspect-sounding story as #2, with the Line theory as #3.
As often happens, it may be that the line and the currency both influenced the nickname. It happens sometimes that terms sort of merge together. For example the word
island, etymologically, is like a horrific genetic experiment.
I think my favorite US regional term is "Yooper".