The phrase to call a spade a spade means to speak plainly without avoiding unpleasant or embarrassing issues.

(The synonymous French phrase is appeler un chat un chat, to call a cat a cat.)

The English phrase originated in the fact that the Dutch humanist and scholar Desiderius Erasmus (circa 1469-1536) misunderstood the Greek word σκάφη (= skáphē – denoting anything hollowed out, such as a tub, a trough, a dugout (i.e. a light boat), a cradle) as used in the following passage from Ἀποφθέγματα βασιλέων καὶ στρατηγῶν (Regum et imperatorum apophthegmata – Sayings of kings and commanders¹), attributed to the Greek biographer and philosopher Plutarch (circa 46-circa 120):

Τῶν δὲ περὶ Λασθένην τὸν Ὀλύνθιον ἐγκαλούντων καὶ ἀγανακτούντων, ὅτι προδότας αὐτοὺς ἔνιοι τῶν περὶ τὸν Φίλιππον ἀποκαλοῦσι, σκαιοὺς ἔφη φύσει καὶ ἀγροίκους εἶναι Μακεδόνας καὶ τὴν σκάφην σκάφην λέγοντας.
     translation:
When the men associated with Lasthenes, the Olynthian², complained with indignation because some of Philip’s associates³ called them traitors, he said that the Macedonians are by nature a rough and rustic people who call a tub a tub.

¹ Both the English translation and the Greek text are from volume 3 of Plutarch’s Moralia with an English Translation by Frank Cole Babbitt (Cambridge, Massachusetts, and London – 1931); I have substituted tub to spade, which Babbitt used to translate σκάφη probably in order to make his text more understandable by using the familiar English phrase.)
² Lasthenes, of Olynthus, betrayed his city to the Macedonians.
³ Philip II (382-336 BC), father of Alexander the Great, was king of ancient Macedonia (359-336).

In his own Apophthegmata, Erasmus rendered σκάφη (= skáphē) as Latin lĭgo/ōn- (meaning a mattock, a hoe) because he evidently confused this Greek word with σκαϕεῖον (= skapheĩon – meaning a tool for digging) or other derivatives from the stem of σκάπτειν (= skáptein – meaning to dig):

     from Apophthegmatum opus (Paris, 1533):
Quum hi qui apud Lasthenem erāt, quererentur, indignéque ferrent, quòd quidam ex Philippi comitatu dicerent ipsos proditores, Philippus respondit Macedones esse ingenio parum dextro, sed plane rusticanos, qui ligonem nihil aliud nossent uocare quàm ligonem. Alludens ad illud prouerbium celebre, τὰ σῦκα σῦκα, τὴν σκάφην σκάφην λέγων. Innuit autem illos reuera esse proditores, Rusticana ueritas quanque rem suis nominibus appellat.
     translation—adapted from Collected Works of Erasmus (University of Toronto Press – 2014):
When the supporters of Lasthenes complained indignantly that some of Philip’s escort called them traitors, Philip retorted ‘Macedonians are obviously unsophisticated peasants, who don’t know any name for a mattock but a mattock,’ alluding to the famous proverb ‘τὰ σῦκα σῦκα, τὴν σκάφην σκάφην λέγων.’ He implied of course that the men were really traitors, for peasant truthfulness calls everything by its own name.

The Greek proverb τὰ σῦκα σῦκα, τὴν σκάφην σκάφην λέγων that Erasmus mentions in this apophthegm is from Quomodo historia sit conscribenda (How to write history), by the Hellenized Syrian satirist Lucian of Samosata (circa 125-circa 180); it translates as calling figs figs, and tubs tubs (source: Dictionary of Quotations (Classical) (London, 1906), by Thomas Benfield Harbottle). Erasmus also mentioned—and mistranslated—this Greek phrase in the adage titled Veritatis simplex oratio (The plain speech of truth) where he wrote of

simplex illa rusticanaque veritas […], τὰ σῦκα σῦκα, τὴν σκάφην σκάφην (λέγων), id est ficus ficus, ligonem ligonem apellans.
     translation:
this plain and rustic truth […], τὰ σῦκα σῦκα, τὴν σκάφην σκάφην (λέγων), that is to say calling a fig a fig, a mattock a mattock.

The same error occurs in the adage titled Ficus ficus, ligonem ligonem vocat (He calls a fig a fig, a mattock a mattock), which begins with:

Σὰ σῦκα σῦκα, τὴν σκάφην σκάφην λέγων, id est:
Ficusque ficus, ac ligonem nominans
Ligonem.

Erasmus wrote the following in the same adage:

Lucianus in Iove tragoedo: Ἐγὼ γὰρ, ὡς ὁ κωμικὸς ἔφη, ἄγροικός εἰμι τὴν σκάφην σκάφην λέγων, id est
Nam ego, quemadmodum ait comicus, rusticanus sum et ligonem ligonem appello.
     translation:
Lucian in the Jove tragedy: Ἐγὼ γὰρ, ὡς ὁ κωμικὸς ἔφη, ἄγροικός εἰμι τὴν σκάφην σκάφην λέγων, that is to say
‘For I, as it says in the comedy, am a country-bred and call a mattock a mattock.’

It was the English schoolmaster and playwright Nicholas Udall (1504-56) who coined the English phrase to call a spade a spade in Apophthegmes (London, 1542), the translation of Erasmus’s Apophthegmata. Interestingly, however, in his translation of the Greek proverb τὰ σῦκα σῦκα, τὴν σκάφην σκάφην λέγων, Udall did not confuse σκάφη (= skáphē) with a word denoting a digging tool but correctly rendered it as boat, one of the acceptations of this Greek word:

Whē those persones that wer at Lasthenes found theimselfes greued [= grieved], and tooke highly or fumyshly, that certain of the traine of Philippus called theim traitours, Philippus aūswered, y^t the Macedonians wer feloes [= fellows] of no fyne witte in their termes, but alltogether grosse, clubbyshe, and rusticall, as the whiche had not the witte to calle a spade by any other name then a spade. Alludyng to that the commenused prouerbe of the grekes, callyng figgues, figgues: and a bote a bote. As for his menyng was, that thei wer traitours in veraye deede. And the fair flatte truthe, that the vplandyshe, or homely and plain clubbes of y^e countree dooen vse, nameth eche thyng by the right names.