I guess so. Which is why I don't think the word matters, as long as it isn't offensive. heck, make up a word if they want for all care.
This is why I a pushing for species. It is kind of dry, sterile, and boring, but in the end I think that is a good thing. I think it is best to use a strictly out of game term, that is in no way connected to the in-game fiction.
The entire concept of "Fantasy Races" is at its core a potential minefield of issues. The very idea of using different "types" of "people" to examine different aspects of human nature and the human psyche, may be a useful literary device, and can create some excellent stories, it is dangerously interconnected with real world issues of racism, stereotyping, and eugenics.
It doesn't help that Tolkien, who is basically the creator of the modern fantasy genre, and a massive influence on everything that came after, was not just a man of his times, he was a man stuck centuries if not millennia in the past. His work is obsessed with sacred bloodlines, racial purity, and bio-essentialism. Lets not forget this is the man who
described orcs as, "Squat, broad, flat-nosed, sallow-skinned, with wide mouths and slant eyes: in fact degraded and repulsive versions of the (to Europeans) least lovely Mongol-types."
I love Tolkien's work. The sheer depth and breadth of his worldbuilding is unparalleled. Truthfully most other fantasy comes across as cheap knock offs of his work. However the more I really look at his work, and force my self to look past my instinctive fanboy love, I am forced to admit that the man had his issues.