Before studying abroad in South Africa I was told that calling native African communities tribes was offensive and inherently racist. The word implied certain negative stereotypes and its use, I was told, should be avoided to stop the spread of these misconceptions. But when I got to South Africa, all the local black people, including the academics, called their communities tribes. I thought 'screw it', they should call themselves what they want. If anything, telling them what they should call themselves is racist and offensive.
So I especially enjoyed the ending of this story, about an American Indian and his struggle with how Germans perceive his culture:
Once, as part of his promotion efforts, he described his documentary in an e-mail to a hobbyist organization as being about "Indian life." He received a quick response informing him that the proper term was "First Nations," that he would do well not to use racist terminology.
"I am an Indian!" Blackbird shot back. "My friends are Indians, my family are Indians. We have always called ourselves Indians. I have a status card from the Canadian government that tells me I am an Indian. You have no right to tell me what I am."
The beginning and middle of the story are also worth a read.