Some of the ladies of the church were organizing an event and they decided that as part of the event they would have a "Chinese Auction." And I sat there in staff meeting, biting my tongue. And when I finally felt that I could do it calmly, I had to raise my hand and ask: 1) Ummmmm.... what exactly IS that? and 2) WOW, I'm pretty sure that's racist.
I was met with sighs of relief from the rest of the staff, who were also confused and feeling that this was pretty blatant racism. The ladies in question, of course, did not understand why naming a type of auction after an ethnic group could be seen as inappropriate in any way. In their minds, that was just the name of the kind of thing.
And while, evidently, the term doesn't come from a derogatory place, per se, it does single out one group of people and label them as "other," so I don't see that it's an appropriate name to use, especially when there are other names that could give a much better understanding of the event.
What other confusing and questionable colloquialisms have you all run into?