The term Indian Giver always confused me because it was supposed to be a derogatory term used toward Native Americans. I always thought that it could be more aptly apply to the United States government in its application of and breaking of the many treaties signed with Native Americans.
From the all knowing and all seeing Wikipedia; 'It is unclear exactly how the expression came to be, but the consensus is that it is based on American Indians having a distinctly different sense of property ownership than people of European ancestry. One theory is that early European settlers in North America misinterpreted the aid and goods they received from local Indians as gifts, when in fact they were intended to be offered in trade. Many tribes operated economically by a form of barter system, or a gift economy where reciprocal giving was practiced.'
So where does the derogatory attachment come into play. As mentioned above a misunderstanding of cultural traditions is one aspect but I have uncovered another that certainly would make the term unpleasant to use.
As I understand it, in the early settling phase of the North American continent Indians were considered a substandard species by the Europeans. They were considered slow witted and immoral. So in time the word Indian became synonymous with being 'bogus or false'. This can be seen in terms like 'Indian Summer' meaning false summer, 'Indian Corn' meaning false corn and 'Indian Tea' meaning a cheap tea substitute.
So even though I believe that the European settlers and later the United States government were the real Indian Givers the term does have an origin that is derogatory to Native Americans.
So kiddies now we can ad this term to all the others that are politically incorrect and it is the right thing to do.