is from Whiggam-more, a corruption of Ugham-more (pack-saddle thieves), from the Celtic ugham (a pack-saddle). The Scotch insurgent Covenanters were called pack-saddle thieves, from the pack-saddles which they used to employ for the stowage of plunder. The Marquis of Argyle collected a band of these vagabonds, and instigated them to aid him in opposing certain government measures in the reign of James I., and in the reign of Charles II. all who opposed government were called the Argyle whiggamors, contracted into whigs. (See Tory.)
“The south-west counties of Scotland have seldom corn enough to serve them all the year round, and, the northern parts producing more than they used, those in the west went in summer to buy at Leith the stores that came from the north. From the word whiggam, used in driving their horses, all that drove were called the whiggamors, contracted into whigs. Now, in the year before the news came down of Duke Hamilton's defeat, the ministers animated their people to rise and march to Edinburgh; and they came up, marching on the head of their parishes, with an unheard-of fury, praying and preaching all the way as they came. The Marquis of Argyle and his party came and headed them, they being about 6,000. This was called the ‘Whiggamors' Inroad’; and ever after that, all who opposed the court came in contempt to be called whigs. From Scotland the word was brought into England. where it is now one of our unhappy terms of disunion.” —Bishop Burnet: Own Times.
Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894
More on Whig from Fact Monster: