This, to a degree. The word "ethnicity" is also a word that looks too modern to put in the game. "Races" in D&D are things like dwarf, orc, goblin, and elf. Gygax's early modules referred to non-human creatures like bugbears and gnolls as "humanoids". I prefer the term "demihuman", at least in a setting where human dominance is inferred. I like the implicit/explicit "fantasy racism" of "demihuman". In more cosmopolitan settings, or among parties or groups that are majority non-human, I use the less offensive "metahuman", a term I shamelessly cribbed from Shadowrun. I mean, except in like, elf society. In high elf society I imagine that everyone who is not an elf is just looked down upon as a lesser being, full stop.