EWTN Catholic Q&A
Question from wondering on 11-20-2012:

Was Isreal a physical place (like the country we have today) in the Old Testament or dies Isreal in the O.I. only refer to a people?

Answer by Fr. John Echert on 11-20-2012:

Both. The geographical land of Israel takes its name from the people to whom it was promised in the OT by God. That name was given to the Patriarch Jacob, whose name was changed by God after a wrestling match with an angel.

Father Echert