Okey, I will try to explain this.
A really really long time ago, before even the Republic was born the galaxy was really preety much undiscovered. Think of it as cavemen on Earth. They did not know about other planets or systems, and they only knew their system. However, there were some exploration but not alot of people did it because hyperspeeding in an uncharted region could lead you to encounted a sun on the way, and you'll just explode or turn to char.
Now, there was a race of people called "Sith" who were bulked up and created the thing known as "Dark Force" They began using force for their own needs and they used the Force to inflict pain and such. The Sith were usually led by one "Sith Lord" who was the most powerful Dark Force user of the time.
Then, althought the Sith died out, some of them went to different points of the galaxies, and spread their ideas. These ideas reached alot of people, and people began using the Dark Force. They wanted to be like the race of the Sith because of their new hobby of Dark Force. So, Dark Force Users began to call their most powerful comrades, who where most powerful in the force, "Sith." They passed on their ideals and so on, however through time the tradition of the word "Sith" lost it's point, and even a Dark Force User who wasn't anything special, refered to him as "Sith"
So yeah, I think it's like that.