From the History of the Mandalorians:
"Many bloodthirsty and amoral Mandalorians resented [Jaster Mereel], having enjoyed the unaccountability of their mercenary lifestyles. Among them was the soldier [Tor] Vizsla, who gathered the dissenters into a splinter group, the Mandalorian Death Watch. Mereel's supercommandos, in turn, recast themselves as the True Mandalorians, and total war ensued."
The narration in Open Seasons makes it sound a bit different, though. While talking to Sidious, Dooku says:
"Decades ago, the mercenary group known as the Mandalorians fractured, giving rise to a chaotic splinter group. They called themselves 'Death Watch' and followed a barbarian called Vizsla, who believed that the Mandalorians should conquer the galaxy. Vizsla orchestrated a bloody coup...against the True Mandalorians still loyal to a reformed murderer named Jaster Mereel..."
I think the issue of potential confusion stems from the Open Seasons writers' idea that the Mandalorians were a mercenary group rather than a people of a specific culture, and that the True Mandalorians appearing in Open Seasons were the only Mandalorians there were before it was understood or retconned—depending on how you want to look at it—that there were more to the Mandalorians than just that smaller force Mereel and later Jango were leading.