I see your point, I guess I'm just using "race" out of habit since that term has been used in D&D since forever. That said, there are many definitions of the word "race", such as "a group of persons related by common descent or heredity" and "any people united by common history, language, cultural traits, etc." so rest assured that I'm not using the term to promote any specific agenda.
As for alternatives, "ethnicity" would work, but doesn't exactly roll off the tongue. PF2 calls it "Ancestry". I guess even "Peoples of Xoth" could work (but "pick a people" sounds a bit weird?). I'm open to other suggestions here...
If you're going to lose 'race' for your human races, I'd normally suggest 'culture' rather than 'ancestry' (edit: except that you have Culture for Civilised/Decadent etc). The Xoth races do seem a mix of culture & descent - of course IRL the two traditionally went together. Traditionally in English-English one might talk about the Scottish race, the English race, being a common descent or heredity as you say. But no one says the American race - my American ex always objected if I called someone (eg our son) "half American".
Ethny is better than Ethnicity, but both sound too anthropological to me. Folk is likely to cause issues with people who think Race is racist, and anyway being Germanic it sounds more Tolkien than Howard.
Ancestry is ok, and means the same thing as traditional understanding of race, but overall I think Culture is best since it would allow for a PC to be raised in a different culture than their ancestry. OTOH one could argue that Ancestry fits genre norms more closely - in the genre one's blood/nature tends to show through over nurture. And since you have Culture for the 'cultural archetypes' it would need fewer changes. Hmm!
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