When was the term “middle grade fiction” coined? And by whom?
According to a recent Wikipedia article , the “Young Adult Library Services (YALSA) of the American Library Association (ALA) defines a young adult as ‘someone between the ages of twelve and eighteen’. Young adult novels have also been defined as texts written for the ages of twelve and up.” But middle grade, in the article, is merely defined as literature for readers ages ten to twelve, with no reference as to who established the term.
Liesa Abrams, executive editor at Aladdin, an imprint of Simon & Schuster, contributed the following for an SCBWI conference blog. 
“[M]iddle grade covers a wide spectrum. It’s often defined as books for readers ages 8-12. So you have to think about whether you’re shooting for the younger or the older end of the spectrum. Generally, your characters shouldn’t be older than 12 or 13–but your story isn’t necessarily MG just because your characters are that age.”
“The plot, the theme, the voice … they all have to resonate. Middle-grade readers have a different world perspective than a YA audience.” This is a wonderful view of MG, but it doesn’t bring us any closer to the term’s origins. But wait, think! Middle grade, Middle school?
Middle school is generally grades six through eight (or sometimes seven through nine). This correlates to approximately ages 11 through 14 (or 12 through 15), which gets us closer to the magic 8-12 bracket.
Next, consider the fact that someone who is 13 is thought to be a teenager, whereas 12 is not. Okay, that seems to nail the upper end, but what of the lower end? Someone who is 8 is generally either ending third grade or entering fourth grade.
Another Wikipedia article state that the “U.S. National Association for the Education of Young Children (NAEYC) … defines ‘early childhood’ as before the age of eight.” 
If we define late childhood education as middle school and high school, then the “middle grades”, school-wise, would encompass students ages 8 through 11(12). This seems a plausable explanation for the age bracket.
Liesa Abrams, in the above mentioned blog, states that whereas a YA reader wants to know what sets them apart, a middle-grader wants to know how they fit into the world.
Interestingly, this corresponds closely with Erik Erikson’s fourth development stage, School Age, ages 6 to 12. 
“Ego Development Outcome: Industry vs. Inferiority
Basic Strengths: Method and Competence
“During this stage, often called the Latency, we are capable of learning, creating and accomplishing numerous new skills and knowledge, thus developing a sense of industry. This is also a very social stage of development and if we experience unresolved feelings of inadequacy and inferiority among our peers, we can have serious problems in terms of competence and self-esteem. As the world expands a bit, our most significant relationship is with the school and neighborhood. Parents are no longer the complete authorities they once were, although they are still important.”
All in all, there seems to be much said about how the term Middle Grade Fiction is both meaningful and appropriate, but I cannot find (so far) who first used the term and when. Maybe you can tell me!