this last came up when a (white) mayoral aide used it at a Washington, DC council meeting, only to have an African American official jump down his throat without researching his etymology first.
http://en.wikipedia.org/wiki/Niggardly#Word_origins
"Niggardly" (noun: "niggard"
is an adjective meaning "stingy" or "miserly", perhaps related to the Old Norse verb nigla = "to fuss about small matters". It is cognate with "niggling", meaning "petty" or "unimportant", as in "the niggling details"....
On January 15, 1999, David Howard, a white aide to Anthony A. Williams, the black mayor of Washington, D.C., used "niggardly" in reference to a budget. This apparently upset one of his black colleagues (identified by Howard as Marshall Brown), who interpreted it as a racial slur and lodged a complaint. As a result, on January 25 Howard tendered his resignation, and Williams accepted it.[1] However, after pressure from the gay community (of which Howard was a member) an internal review into the matter was brought about, and the mayor offered Howard the chance to return to his position as Office of the Public Advocate on February 4. Howard refused but accepted another position with the mayor instead, insisting that he did not feel victimized by the incident. On the contrary, Howard felt that he had learned from the situation. "I used to think it would be great if we could all be colorblind. That's naïve, especially for a white person, because a white person can afford to be colorblind. They don't have to think about race every day. An African American does."
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