In a footnote in the handouts for Unit 1, Prof. Terentyev mentions the reference by outsiders to Tibetan Buddhism as 'Lamaism'.
In a public teaching on Atisha's Lamp in 2002, His Holiness the Dalai Lama referred to this point at the opening of His first talk.
Here he makes the point that Tibetan Buddhism is "Pure Nalanda tradition" and goes to some lengths to refute this view of Tibetan Buddhism as 'Lamaism'.
He then goes on to describe how Nalanda masters practiced Theravada as well as Bodhisattvayana and Tantra.
All lectures from this session are available for download at lamrim.com.
Regards.
Tibetan Buddhism as 'Lamaism'
Lama in Tibet generally means a lay or ordained religoous teacher. In a narrower sense, it means a Tibetan Buddist teacher. Calling Tibetan Buddhism as Lamanism is like calling Bhante, a honorable greeting of a Theravada monk as Bhanteism for Theravada Buddhism.
Tibetan Popes
Lamaism goes hand in hand with the (obnoxious) "Catholicization" of Tibetan Buddhism by western observers, such as the U.S secret service mission during WWII.
That is, referring Catholic honorific names (holiness, excellency...) to Tibetan Buddhist high lamas.
Glenn Mullin (the noted Tibetologist) also expresses distaste for such a practice.
Westerners were probably just trying to make sense of Tibetan Buddhism.
FWIW