There was a Frisbie Baking Company (1871-1958) located in Bridgeport, Connecticut that provided pies to many of the nearby colleges. When the students were bored they started throwing the empty pie tin was thrown around. In 1948 Walter Morrison created and patented a plastic version that flew better than the pie tins.
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The proper name is 'flying disk'. Frisbee is a registered trademark. Walter Morrison produced the first commercial flying disk in 1948.
The word 'Frisbee' itself originated with the Frisbie Pie Company which made pies sold to college students in Connecticut. Students discovered that the pie dish could be thrown as a flying disk and called them frisbies. The company that was producing Morrison's flying disk learned that college students were calling their product frisbie and registered the name Frisbee.
Fred Morrisondiscovered a market for the modern-day flying disc in 1938 when he and future wife, Lucile, were offered 25 cents for a cake pan that they were tossing back and forth on a beach in New Haven, CT.