I always understood PC to mean something more along the lines of calling somebody AA instead of black. I don't think calling someone the n word is a matter of PC. That's just bigotry. Slurs are negative by definition. "Black" always sounded neutral to me. And maybe there is a grey area, but when I criticize political correctness, that is what I have in mind.

However, I do notice that people use anti-PC discourse to justify bigotry of the worst kind, and I do not wish to be associated with them. I also noticed that some people who are close to me are so obsessed about calling out PC behaviour and I just don't see the point. Why does it matter so much to them?

Personally I don't care which term I have to use. It's not free speech I worry about. What bothers me is that there is very little consensus about these things and sometimes the "PC" term is so euphemistic that it actually sounds worse to me. It can often sound like the person's background/ethnicity/religion/heritage is the problem and not the prejudiced attitudes that sometimes thrown their way. When you not only correct someone over something that is so dubious to start with and act like you have the moral highground and they are biggots for not thinking like you, then it's no wonder so many hate PC culture. But, as I said, I think the whole debate is being tarnished by people who cannot differenciate between what's politically incorrect and what's just straight out wrong.