Locus carried an early reference to “steampunk,” in a 1987 letter from K.W. Jeter:
Dear Locus:
Enclosed is a copy of my 1979 novel Morlock Night; I’d appreciate your being so good as to route it to Faren Miller, as it’s a prime piece of evidence in the great debate as to who in “the Powers/Blaylock/Jeter fantasy triumvirate” was writing in the “gonzo-historical manner” first. Though of course, I did find her review in the March Locus to be quite flattering.
Personally, I think Victorian fantasies are going to be the next big thing, as long as we can come up with a fitting collective for Powers, Blaylock and myself. Something based on the appropriate technology of that era; like “steampunks,” perhaps….
–K.W. Jeter
See the original at Letters of Note: The Birth of Steampunk.