You're responding to someone whose point is really clear but to quote an article on the history of American cheese:

The first step in transforming American cheese into the distinct entity it is today can be traced back to Switzerland in 1911 when Walter Gerber and Fritz Stettler developed the world's first processed cheese by shredding Emmentaler cheese and heating it with sodium citrate into a firm, unified substance upon its cooling.

This swiss process was then picked up by a canadian by the name of Kraft looking to make a cheese with longer shelf stability for the purpose of being left open at delis for slicing. It was made by melting cheddar chunks together. And stirring.

The term american comes from British snobbiness.

The inability to legally call it cheese comes from the natural cheese lobby. If it matches this criteria it cannot be called cheese:

a stable concoction of natural cheese cheese bits mixed with emulsifying agents [used to make] a homogenous plastic mass.

That having been said american cheese is disgusting and anyone who purposely eats it is insane to me.