Etymology of "people"

William Hansen, in Classical Mythology (Oxford Univ. Press, 2004, recounts the myth that Deucalion and Pyrrha peopled the earth by casting stones over their shoulder, and thereby asserts that the word “people” comes from Greek laas, for pebble, and laos, for people (p 73.) I have no Greek, nor am I a scholar, but would be very interested to hear better informed opinions.