Remember, "Hispanic" is a U.S. Federal Government construct made to comply with a wide range of "equality" legislation and regulation during the 70's.
Those laws required the quantification of minority groups, but at that time we had Census data on Blacks, Asians, Native Americans and Pacific Island based on race, but no separate data on persons from Spanish speaking nations or people in the US who were current or heritage Spanish speakers.
Since the category covers, potentially, every race on the planet the government was faced with a category now protected by law that overlapped races. So they came up with a recycled and obsolete term based on the Iberian peninsula, Hispania. It seemed neutral and able to be redefined, so the bureaucrats (emphasis on the last four letters in that term) decided that the 1980 Census would ask a separate question separate from "race" about being "Y/N" Hispanic.
And there you have your tax dollars at work, figuring out how to separate rather than join us through the miracles of terminology.