[ReignOfError]

It's all in the context.

Absolutely. Another poster raised the issue of whether "Jew" is a slur or not. If I made the statement that "Jews don't eat pork," that could hardly be described as racist. But if I yelled "Hey! Jew!" in an angry tone at a stranger in the street, he'd have every right to believe that I meant him ill.

You wouldn't call someone a racist for using the term Brit for a Britisher, but I've heard anti-British Irish use it as a term of invective.

As you said, context. Redneck, cracker, even the N-bomb are affectionate jibes from a friend, but a slap in the face from a stranger. I used to routinely call an Irish-American friend a "drunken Fenian bastard," because a) he was (to be honest, we were), 2) he knew I meant it playfully, and iii) it's an archaic enough insult that it's almost quaint. I wouldn't try that on a red-haired stranger in the street, because as I've passed the age of 35, I am more aware of my own mortality than I was in younger years.

[driftless]

First you said it wasn't in the context, and then you said it was. Which is it? Most likely anyone using the phrase "Jap" means it in a derogatory way. But even you stated that certain people can use what are considered derogatory words if it is in the right context. I don't hate Japanese people, so I don't see how calling someone a Jap is any worse than calling someone a Brit as long as you don't hate that person or group. I call Germans "Krauts" even though I have German ancestry. A "Kraut" was (and maybe still is) considered very derogatory fifty years ago.

Remember the race merchants feel perfectly fine calling certain groups "people of color". But if you called someone a "colored" person, you'd be accused of being a racist by those same people.