The "first" eraser was most probably used by an Italian painter who advised his students in the 16th century to wipe out pencil strokes with bread.
Then in 1770 the British naturalist Priestly pointed out that rubber (caoutchouc) cubes were ideally suited for erasing.
He thus called this substance "Indian Rubber". Although the "rubber" came from America, it was customary at the time to label everything coming from America as Indian and this inaccurate name remains with us today.
Rubber is still being referred to as Indian Rubber, however, the term has somewhat more credibility now, as the rubber comes from East Asia.