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Sorry, but you two are off your rockers on this one. Historically, virtually every people believed they were superior to all other people. Europeans just made it popular to encourage, for economic reasons as opposed to plain-faced military conquest, the combination of tribalism and egotism that are tendencies of all people.
The simple fact that Europeans invented the negroid, mongoloid, caucazoid terms doesn't mean they invented the concept that "people who don't look like us ain't like us". I don't think "gaijin" was derived from Latin.
Gaijin just means "person from another country" or "outsider"
Yes, and it has no negative connotations. That's why it's still used so frequently in mixed company and not considered remotely discourteous.
Like how my name can't properly be written in hiragana, because that's not the alphabet used for foreign words or pronouns. Separate but equal, I guess
That is a linguistic issue, not a social/racial one.