The origin of the word gonzo is inextricably linked to writer Hunter S. Thompson, famed for his style dubbed gonzo journalism. Gonzo is a highly subjective, first-person style, characterized by distorted and exaggerated facts. Thompson first used the word in print in the 11 November 1971 issue of Rolling Stone:
But what was the story? Nobody had bothered to say. So we would have to drum it up on our own. Free Enterprise. The American Dream. Horatio Alger gone mad on drugs in Las Vegas. Do it now: pure Gonzo journalism.
Thompson explained where he got the term a year later in Stop Presses by R. Pollack:
I ask Hunter to explain. Just what is Gonzo Journalism? "Gonzo all started with Bill Cardosa, after I wrote the Kentucky Derby piece for Scanlan’s the first time I realized you could write different. And I got this note from Cardosa saying, ‘That was pure Gonzo journalism!’Some Boston word for weird, bizarre."
Thompson was wrong about it being a Boston regionalism. More likely, it is from the Italian gonzo, meaning foolish, or the Spanish ganso, meaning goose or fool.
From Thompson’s usage, the term generalized to mean anything foolish or bizarre. -- www.wordorigins.org