My recent answer to this question, as published on Quora:

I know some very unfamiliar bits of history related to this question. And impart some of them in this piece. Here is a sample:

In the late 19th century, many of the more radical classical liberals had abandoned Liberalism for “individualism.” See the writings of Auberon Herbert (who coined a term for his variant, “voluntaryism”), J. H. Levy, and Wordsworth Donisthorpe. A mere generation later H. L. Mencken used that term to defend a simple market-based republicanism in Men versus the Man. More radical forms of individualism were revived by Albert Jay Nock, Isabel Paterson, Rose Wilder Lane, and Ayn Rand in the decades after, and at mid-century this group in America took “libertarian” from the anarchists. And then these anarchists manqué reinvented the Molinarian idea, and things go even more confusing.

In the 1960s, a simple newsletter called Innovator had begun its life as Liberal Innovator. Other samizdat journals abounded in this decade, and by 1972, the Libertarian Party had been formed by Ayn Rand fans who had given up on Nixon’s heavily statist Republican administration.