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Wikipedia gives this answer, which may be of help: The term Nazi is derived from the first two syllables, as pronounced in German, of the official name of the German Nazi Party, the Nationalsozialistische Deutsche Arbeiterpartei. The Nazis did never refer to themselves as "Nazis," and instead used the official term, Nationalsozialisten ("National Socialists"). In German, Nazi mirrors the term Sozi, a common and slightly derogatory term for the Social Democratic Party of Germany (Sozialdemokratische Partei Deutschlands), the Nazis' main opponents before obtaining power.
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Just to win popular support in Weimar Germany. Like you say, they opposed socialism. Their name was actually a contradiction in terms.
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