In every culture, there are words and phrases that are offensive. A large part of it is upbringing and history, and for that reason, it's not as obvious to people outside of that culture as to why it's offensive.
Wikipedia has enough information about the word that it may take a while to read through, but it will give you some ideas.
At the end, it's a term that refers to and implies heavy racism, and most people try to avoid it over here.