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Actually, "goy" means nation, "goyim" means nations. The Bible applies the word to both Israel and other nations-- with Israel being singled out as "goy kodesh"- a "Holy Nation." The term is not offensive.

Unfortunately the term is offensive, as many perceptive individuals can pick up on.

There is a Hebrew word "goi" that means nation, but the modern term "goy" comes from Yiddish.

From The American Heritage® Dictionary of the English Language: Fourth Edition. 2000.

NOUN: Inflected forms: pl. goy·im (goim) or goys

Offensive Used as a disparaging term for one who is not a Jew.

ETYMOLOGY: Yiddish, from Hebrew gôy, Jew ignorant of the Jewish religion, non-Jew. See gwy in Appendix II.

http://www.bartleby.com/61/1/G0210100.html

Unfortunately the term is offensive, as many perceptive individuals can pick up on.

Actually, to be more accuate I should have said "...the term may be offensive...".