PHILIP ESLER has published an essay at Bible and Interpretation arguing that we should refer to first-century Jews as "Judeans, not "Jews": Identity Matters: Judean Ethnic Identity In The First Century CE
This is an interesting argument, which Philip and Josephus-scholar Steve Mason have been making in technical publications for some time. I have to say that so far I am not convinced. It is true that Ioudaios in the first century refers to an ethnic/geographic and religious identity, just as other names of peoples did in that area in that period. But in modern usage "Jew" and "Judaism" likewise mean both an ethnic identity and a religious one, and this identity remains tied to a particular geographic origin. Certainly there are differences between the modern words and the ancient one, but these are nuances that are best left to explanation in introductions and footnotes rather than a wholesale change in terminology.
The proposed change starts from the misapprehension that the modern terms "Jew" and "Judaism" refer only to a religious identity like "Christian" and "Buddhist." But the solution is to make clear that, unlike many other religions, Judaism also involves and always has involved an ethnic identity and even a recognition of a particular geographical origin. In other words, correct the misunderstanding of the modern terms, don't drop them because of it.
There is also the unintended consequence that calling first-century Jews "Judeans" implies a qualitative distinction between them and modern Jews, even though the close genetic and cultural continuity between them is undisputed. The opportunities this implied erroneous distinction raises for abuse in modern political discourse are obvious and disquieting.
But the political implications are a side issue. If I thought the change in terminology had a solid intellectual payoff, I would not be worried about them. But calling Jews in the Second Temple period only "Judeans" is problematic in itself. It is overkill and at best it reminds us what the traditional terminology really means, if we need reminding. As I said, I am not at all persuaded that it is helpful.
I would like to say more on this at some point, and I have some notes put aside, but I'm out of time for now. (It doesn't help that a version of this post accidentally got eaten by Blogger yesterday and was irrecoverable.) Meanwhile, my earlier comments (here and here) on Jonathan Z. Smith's "polythetic" approach applied to Judaism are relevant and may clarify my position. The links to my 2002 conference paper have rotted, but you can read it here: "Jewish Pseudepigrapha and Christian Apocrypha: (How) Can We Tell Them Apart?"