My favorite radio station recently ran a trivia quiz about the three colors that have had their names changed by Crayola. They are "prussian blue" to "midnight blue," "flesh" to "peach," and "indian red" to "chestnut." The "flesh" change is merited, and I applaud the company for making it. But the other two? "Prussian blue" was changed upon request by elementary school teachers who claimed that students could "no longer relate to Prussian history." Is the word "periwinkle" any more meaningful to a five-year-old? It seems to me that this would be a fantastic way to connect a history lesson to something more familiar and interesting to kids.
As for "indian red," the color refers to a pigment from India, not to the skin color of Native Americans. When it comes to questions of possibly offensive language I like to err on the side of caution, but not when the offense-taker does so out of ignorance. It's uncomfortably similar to the controversy several years ago over a DC staffer's use of the word "niggardly," a word which is absolutely, completely unrelated to the term "nigger." If you're going to take offense to a term, educate yourself first.