Interesting reoccurring topic this one. I have often heard the idea suggested that most racism or xenophobia is generated within the group against which it is apparently perpetrated, because they are the ones who know each other best. There seems to be this naturally tendency to speak in derisive terms of one's own 'group' (perhaps in jest), which in turn acts as a means to delineate the boundaries of the group/race/etc. This notion seems to be supported by the fact that I have received joke mails along the lines of 'You might be from [place name] if you .....'. Of course, this process flows in the other direction too - where derogatory terminology is adopted by the group against which it is directed - these words then have particularly ambiguous intent.

I wonder, however, whether the origins of some culturally/racially derogatory terms can support the idea of xenophobia from within.