Or it could be regionally dependent, like how saying gypsy is fine in the US, but apparently a big no-no in Europe.
Can confirm.
In Ireland at least, the Traveler Community are a pretty big deal (for better or for worse), and have specific parks and areas in the country where a lot of them go to park their caravans and what not. And a "member of the Traveler Community" is an officially recognised status by the government in Ireland. For example, if you are applying for social welfare in Ireland, you would have to state whether or not you are a member of the Traveler Community and would have specialised questions to answer for that kind of situation on your application form.
There is a big thing about members of the Traveler Community being discriminated against in all kinds of settings. Irish Travelers have a stigma of being troublemakers, for example. So in schools, if an incident happens in a classroom, and the teachers don't see for certain who it is, but there is a Traveler child in the classroom, then the teachers could end up assuming the Traveler child was the cause of it, even if he wasn't. Which is obviously unfair, and discrimination like this is a legitimate problem for Travelers.
As such, there are various insulting slang terms thrown at Travelers. "Traveler" is the socially acceptable, inoffensive term you use if you absolutely need to make the distinction, but in itself shouldn't be used unless you HAVE to, and you generally shouldn't assume someone is a Traveler and ask if they are (unless it's for professional purposes, like the aforementioned scenario of applying for social welfare), but they will tell you instead if it's relevant. As far as outright offensive terms go though, "gypsy" is one that's used here, but the two more well known ones are "knacker" and "pikey".
As for why they would be discriminated against, the discrimination comes from a few things:
-Some travelers having caused legitimate problems in some communities, like dumping, stealing, and violence, have given all of them a bad name.
-They have a very distinct accent that's specific to them, so it's easy to make fun of them by imitating it.
-Tend to have an untidy appearance due to their lifestyle, which makes them identifiable, and it turns a lot of people off from them. Even their faces tend to look rough.
-They have a tendency to be loud and very outspoken. Again, a by-product of their lifestyle. They spend a lot of their time outdoors.
There's more to it than that but the discrimination more or less comes from the fact that Travelers legitimately live a very different lifestyle to the average Irish person, so I guess people must feel alienated from it. And generally, a run in with one bad traveler is enough for people to assume all of them are like that.
Another big point of contention is that some of them do arranged marriages and what not, still. This is because there is a surplus of females in the Traveler Community.