They contacted a specialist from a seed company to ask him about Spanish onions who was actually in Spain at the time. He advised that the term Spanish was most likely introduced by the supermarkets in about the 1980's.
When we first started growing red onions in Australia, the varieties (seed) were sourced from the USA. Many of these had Spanish sounding names and in fact are a Mediterranean type of onion that likes hot humid conditions.
Spanish onions as a variety do not grow well in colder climates. In the US a Spanish onion can be red, white or yellow .
They found the following on an American seed company's website. You can see how they came to have the name change.
Allium cepa 'Red Burgermaster F1'
Onion, Sweet Spanish 'Red Burgermaster F1'
Sydney Markets name these 'Spanish' onions as 'red onions'.