Racism can also be understood as our common thought patterns of people whom we perceive as different (colour, nationality, religion) which can discriminate against people in a most palpable way. This is certainly a thing in FR. And as you said, if racial tensions are commonplace in FR, shouldn't we have proper words to discuss them with? It's not like "racist" is a bad word, I fail to see how it's more offensive than bigot, xenophobe, and a slew of other words unrelated to the concept of "race" or "racism".
I just seem to very strongly disagree with your (or the DMs' in general) understanding of what is allowed/tasteful/inflammatory in our fantasy setting. I could, with good conscience, playing my dwarf who believes in the freedom of sexual expression call someone a "homophobe" for thinking or expressing that homosexuality is somehow bad. I guess she could call that person a bigot or a prude, but that doesn't make nearly the same statement.
I understand that "racism", "racist", and "race" as terms which denote qualities of a person are conflicted in the real world due to socio-political inflammations, but it's not the players we are calling names but the characters. Isn't our RP rife with discriminatory and offensive terminology?
I'll re-affirm the situation.
We don't mind you using the term 'Racist' very occasionaly. We will only grow concerned when it is a word your character uses frequently.
If this bothers you - why are you using the word 'Racist' so much?
Are you using it in reference to monsterous races?
If so you shouldn't be. The hatred of monsterous races isn't racism - it's
common sense. LIkewise a heavy distrust of Tieflings isn't not racist, it's
common sense
'But what about hatred of 'goodly' races, like elves and such? Isn't that racism?'
Yes, you're right. And using that to describe the situation is fine. But here's the thing - why are you going after this person so much?
I mean don't get me wrong, someone saying elves are icky is bad yeah, but surely you have more to worry about? Like the massive goblin hoard in the mines. The Huge portal to the hells. The dozens of warlocks running about. The undead appearing on Cordor lands. The Banites gathering in Minmir? Arn't all these things more important than some guy who says 'I hate elves?'
'Yes, yes, but this guy - he killed some elves!'
'Ok. Then call him a murderer. Call him a torturer. Call him after the things he's -done- that should warrent such outpouring of hatred. There's tonnes of things you can then call them! But if a huge chunk of your rp seems to be about the ability to call someone 'Racist' then I think you really need to look at your character concept.
This too shall pass.
(I now have a DM Discord (I hope) It's DM GrumpyCat#7185 but please keep in mind I'm very busy IRL so I can't promise how quick I'll get back to you.)