Most of February Spent Figuring Out What the Heck to Call People

Of the 14 AP Stylebook updates I received in my e-mail during the month of February, 10 of them have to do with how to classify people.
It started Feb. 1, when the words “mentally retarded” showed up in headlines across the world after a couple of women, who were “mentally disabled” (now the preferred term), were blamed for a Baghdad bombing.
From there, the stylebook covered updates on “tribe, tribal,” “Asian-American,” “Latino,” “Chicano,” “indigenous,” “nationalities and races,” “Native American,” “African-American,” and “black.”
My questions are: Are we spending too much time trying to find racial and ethnic labels to classify and divide people, or are we just trying to be as factual and descriptive as possible? Are there points when the latter proposition leads to the former, and if so, what are those points?
Closing thought: as I keep getting these updates, I realize just how outdated the hard-copy stylebook I bought at the beginning of the semester really is.