What's in a name

[Tobus]

I can't disagree with any of this really. But I will point out that a person can not always assume that offence is intended, even though offence can be taken.

Of course. I usually don't assume that offence is intended unless it's obvious that the speaker is hurling an insult. But I do think that people display varying degrees of casual diminution of other groups by using slang terms such as these. It's a subtle psychological tool, and one that many people don't even realise they're utilising when they do it. Even shortening the name of a nation or region can carry a slight edge of sarcasm, like the way people here in my area often refer to "Brits". It's not necessarily meant to be insulting, but it's definitely not meant to be respectful. And adding a diminutive at the end like "Aussie" or "Frenchie" can be anywhere from casually slang to downright rude. So much depends on context that it's impossible to know whether the person/group will take offence, or to what level.

I don't give too much thought to so-called political correctness, nor do I advocate toe-tipping through life. People nowadays seem to take offence at everything and it can be impossible to communicate effectively in that sort of environment. But I've always held the position that it's better to call a person or a group by their official name out of respect, unless one is in the company of intimate friends. Resorting to slang names amongst strangers seems a bit linguistically lazy and tactless.