Coined by Geoff Fraizer and Greg Boyko, who played the online multiplayer game Warcraft II: Tides of Darkness under the names Shlonglor and Warp. The pair had become so proficient at the game that few people would play against them, so, in order to avoid scaring off potential competitors, they created alternate accounts named PapaSmurf and Smurfette (characters from the Smurfs comic franchise).[1][2]
So basically the most infamous and potentially first widely known instance of this behavior, well they just picked Smurf character names, presumably for the effect of it being more humiliating to be owned by derpy cartoon characters.
Also, apparently ‘smurfing’ or a ‘smurf account’ also means basically a fake/decoy/money laundering/washing bank account:
(law enforcement, banking, slang) A bank account of many intended to handle illicit money in amounts too small to raise suspicion.
https://en.wiktionary.org/wiki/smurf_account
So basically the most infamous and potentially first widely known instance of this behavior, well they just picked Smurf character names, presumably for the effect of it being more humiliating to be owned by derpy cartoon characters.
Also, apparently ‘smurfing’ or a ‘smurf account’ also means basically a fake/decoy/money laundering/washing bank account: