When civic leaders were searching for a name for the town's new professional baseball history with what they hoped would be crowd-drawing showmanship.

They christened the team the Rock Hill Chiefs, and invited Samuel (Thunderbird) Blue to leave the improverished Catawba Indian reservation nearby and earn some pocket money by serving as a mascot for the team. Wearing a buckskin outfit and full-length headdress copied after the western Plains Indian garb that the city fathers had come to know through motion pictures, Chief Blue would go on the warpath near the foul lines at home games. It had little to do with Catawba history, but it pleased the crowd.

The Chiefs, like other southern small-town baseball teams, fell victim in the 1950s to television's impact and folded. But the Catawbas, a tribe that has been dead in all but name in recent years, survives, however precariously, and is creating major problems for the muddy Catawba River.

Those problems center on legal claims by the Catawbas, who are seeking a $100-million package of land and financial compensation for 144,000 acres of land they assert were taken from then fraudulently a century ago.

Since the Catawbas began talking two years ago of filing suit if federal, state and local authorities did not offer them a settlement, business expansion has begun to slow. Title insurance companies and large mortgage lenders from outside the state are reluctant to do new business here until the challenge is resolved. Identity Threatened

The Roughly 1,000 Catawba Indians in South Carolina are part of a people almost lost to history. For some of them, the Indians' struggle involves not only a long-delayed thrust for money, land and institutional power, but also a last chance to preserve the fragments of their surviving tribal identity.

Younger members of the tribe have been fleeing that identity in recent decades, moving into "white" educational systems, jobs and society as quickly as possible. Today, fewer than 200 Catawbas live on the 630-acre reservation south of Rock Hill. Mobile house trailers, not wigwams, dot the unexceptional parcel of gently rolling wooded land. None of the reservation's residents, including the present chief, Gilbert Blue, speaks more than a few words of the nearly extinct Catawba language.

Blue is a 44-year-old Navy veteran who works as a machinist in a tire manufacturing plant and is known locally as an accomplished country and western singer. As his grandfather, Samuel Blue, did when he needed an outfit that would convince townpeople he was an Indian, Gilbert has turned to the western Plains Indians for inspiration and support. If he is successful, the Catawba reservation would probably resemble modern western reservations more than traditional Catawba living arrangements.

Catawbas who return to an expanded rservation would be able to live off a combination of tourism programs, agricultural projects, factories and other enterprises which Blue hopes to set up with the development fund he is seeking as part of the settlement. This blueprint of modern economic control, patterned after western reservations, would expand the chief's importance well beyond the traditional Catawba limits and would begin a new economic era for Catawbas, who historically have been hunters and fishermen. The tribe's name means "People of the River," and they resolutely have resisted becoming farmers and businessmen.

With their own cultural heritage worn down by time and isolation from their tribes, many of those who can be described as Catawbas today have joined their white neighbors in taking their idea of what their history was like from motion picture and television portrayals of the Sioux, Apache and other tribes of the West.

"Catawba history has been garbled and fed back to the Catawbas themselves by white who assume that eastern Indians were just like Plains Indians, "says Ann Martin, a sociologist who is working on the tribe's history. "Many young Catawbas have no idea that their ancestors lived in log cabins long before the whites came or that Catawba chiefs never wore the long headdress of Plain tribes."

The Catawbas may have had unique forms of traditional dress, but that would be part of their cultural already lost to history. What is known is that and other eastern woodlands Indians decorated their soft buckskin outer garments with bits of fur, a few feathers, porcupine quills and seashells. Settlement Challenged

A NEW DEBATE has broken out within the tribe in recent weeks on using a revisionist approach to the tribal past as the guiding force for the future, as Chief Blue wants to do. His plan to get a 32,700-acres tract of mostly undeveloped land to add to the present reservation and an estimated $30 million development fund it is being challenged by tribe members who want a straight cash payout from the government of about $100 million to be divided up the tribe.

"My clients have seen what life on the reservation is like and they have no romantic illusions about that life," says Robert M. Jones, a white lawyer whom the dissidents have retained. "Gilbert Blue's dream of reservation like the large western tribes is a nightmare for these other Catawbas. While they are interested in their heritage in the way an Italian-American or Anglo-Saxon is interested in theirs, they know that economically the Indians has to live in the white man's world and they want to get on with it."

Blue conceded that many members of the tribe see the straight cash settlement idea as "tempting. But accepting it would mean we would be dissolved as a people. Our children would probably grow up with no association with the tribe if it went that way. What we need is to give them the facilities to keep their heritage alive and the means to run business enterprises and agricultural programs on the reservation."

Blue said that the idea of renewing the Catawba claim came to him in 1975 after he met attorneys for the Native American Rights Fund at a convention in Washington. The fund is based in Boulder, Colo., and the Catawba dissidents assert that it is dominated by western tribes who want to strengthen the reservation systems in the East.

Except for a brief spell 30 years ago, the federal government has not been involved in setting up a Catawba reservation; the Catawbas have been under state and local authorities. Those authorities and the Catawbas themselves seem to have considered the reservation as a kind of accidental holding house for the Catawbas while they moved toward cultural and economic assimilation.

The Catawbas have lacked the cohesiveness and militancy of the western Indian nations, whose often large reservations were imposed on them through wars. That militancy, like a growing number of trends in the United States, clearly is moving from west to east.

Blue acknowledged that the Catawbas probably would need some outside expertise to run and expanded reservation and added that it could come from the western tribes with experience in that field.

Extensive intermarriage with whites and the drift from the reservation have all but erased distinguishing Catawba characteristics and the tribe has had to established a legal defination of its members. Anyone who has a Catawba ancestor within the past five generations and who is entered on the tribal rolls is considered a Catawba. Until the prospect of a large cash settlement loomed, few members of the tribe appeared to be interested in keeping that identity alive. Origin of the Dispute

THE ESTIMATED 1,000 persons who meet the legal definition are remote descendants of a once-powerful tribe which escaped the wholesale slaughter and forced relocation into western reservations that the white settlers vicited on most Indians. The Catawbas in fact helped the whites fight the other tribes and were rewarded by not being pushed off their lands.

But the wars and disease devastated the tribe, and settlers gradually moved onto the Catawba land and got court recognition of their claims, squeezing the Indians into a 630-acre tract. In 1840, the state of South Carolina sought to regularize the chaotic situation by signing a new trendy with the Indians that promised them a cash settlement and a bigger reservation in return for clear title to 144,000 acres. The legislature neglected, however, to come up with the cash payment and the land for the expanded reservation, and failed to get Congress to ratify the treaty, as the Non-Intercourse Act of 1790 required.

"The legislature seemed to be of the opinion that the tribe would soon die out anyway, so why bother?" Jones, the dissident's lawyer, said.

The treaty, however, opened the way for the establishment of Rock Hill as a town. Over the next century, the existence of a small Indian reservation outside the town was of little consequence to townspeople. Finally admitted to white schools in the 1940s, the Catawbas were not permitted to ride school buses with whites. It was another decade before they penetrated manufacturing jobs and the white economy of this area in any large numbers. That began the exodus off the reservation.

Since the disidents began seeking a cash payoff, white residents of Rock Hill have mixed cynicism with the anxiety and hostility that Chief Blue's claim originally stirred.

"Let them have the money," one local businessman who considers himself a wag is now saying. "We will get it back in three weeks anyway."

"If the Indians file suit, it will be years before it works its way through the courts, and all land deals will be frozen," says Kenneth Holland, the district's Democratic congressman. He recently visited Mashpee, Mass., to study the results of a similar suit there. "I only found one business that expanded in Mashpee in the last two years - the local liquor store."