How do we decide in English which form we will use to call the people of a certain country? Why is it Israeli, Iraqi, Iranian?

Welcome to the board imp.

Add /ese, /ian, /ish, /etc and it gets confusing. (or am I just easy to confuse?)

Here are some interesting geographic clusters of endings. I have no idea why this may be so:

Chinese
Japanese
Taiwanese
Burmese
Siamese
Nepalese
Vietnamese

Welsh
Irish
Scottish
English
British
Cornish

Bolivian
Brazillian
Peruvian
Ecuadorian
Chilean
Colombian

We could add: Venezuelan, Paraguay, Uruguayan. , Argentinian (can be Argentine) Costa Rican, Salvadorian, Honduran, Guatemalan, Dominican, Cuban, Haitian, Bahaman Mexican, Canadian, American
Don't know: A person from Belize, many of the Carribean Islands

We could add: Spanish, Swedish, Finnish
Don't fit pattern: Italian, Belgian, Dutch, Norwegian, Greek, etc.

And, of course, don't forget my dead horse: United Statesan, or United States of American, or -- oh, that's right, the citizenry of the United States of America don't have a word ...

the citizenry of the United States of America don't have a wor

We're the default.

Italian fits the pattern. I always considered that the term "American" referred exclusively to citizens of the United States. I once asked a young man from Hong Kong what the equivalent was - HongKongian, what? He said that it was "Hong Kong Chinese", although he said this wouldn't apply to someone whose racial origin was other than Asian. Never did figure that one out....

Most Canadians would consider "an American" to be from the US but would agree that we are North Americans.

Yes, that's true. I once had quite an argument, though, with someone who referred to something that had happened in Canada and said "Only in America, eh?" He said we were Americans because we were North Americans. I was some upset about it, because I'm North American, but NOT American.