The term "butterscotch" is thought to originate from the confection's primary ingredients – butter and the process of "scotching," which in this context means to cut or score. The "butter" part of the name straightforwardly refers to one of the key components of the sweet.

Butterscotch is often used as a flavour for items such as dessert sauce, pudding, and biscuits (cookies). To that end, it can be bought in "butterscotch chips" made with hydrogenated (solid) fats to be similar for baking use to chocolate chips.

Origin. Butterscotch is claimed to have been first named in 1817 in Doncaster, England by Samuel Parkinson. He had begun making the candy earlier under the name of buttery brittle toffee. The company that produced the candy received the Royal Seal of Approval for their highly demanded export.

butterscotch, usually hard candy made by boiling brown sugar and butter and sometimes corn syrup together in water. The derivation of the name is disputed as to whether it denotes the candy's origin in Scotland or an original ingredient of “scotched,” or scorched, butter.