I hear all the time that that's a horrible word, but I'd like to know how it became so bad.
Commenters: OP censored the word "nigger". Get over it. You know exactly what was meant, and you're either capable of providing a good answer or you're not.
Joke answers aren't appropriate for this subreddit. Any more attempts at humour relating to OP's choice to self-censor that aren't otherwise valid answers will be met with a ban.
To understand the word and it's connotations you have to also understand its etymology. There isn't any exact year or place the word is known to have first been used but it became mainstream in the 1800's.
As a word it is a bit of an amalgamation of several different non English words for black and black people. In Spanish the word for black is Negro, in french the word for black people was nègre (which itself is often considered an offensive term today because it was also used as a derogatory term) and the latin root of all these words; niger, which means black in Latin.
Originally it was merely a word Americans used to refer to a black person and had a neutral connotation. Also strangely enough until the mid 1800's it was sometimes spelled "niggur" and was a word many people in the western frontier used to refer to one another like we would with "dude" today. George Ruxton talked about this in the writing he did after exploring the far west in the mid 1840's.
However by around 1900 the word had evolved into a pejorative (although it was still used by quit a few in literature in a non pejorative way, such as Joseph Conrad, who in 1897 published "The Nigger of the Narcissus" who's main character is a black sailor who is only shown in a positive sympathetic light). "Colored" replaced it and nergo in the mainstream for simply referring to black people in a neutral way. Later on colored would to be dropped and "black" would be adopted, and today black is being phased out in some ways for African American.
The history of the N-word is a long one, and its transition from colour descriptor to racial epithet is inextricably linked to the racism of the system of African slavery that was prevalent in America. I’ll start this post by looking at the origins of the word, and its appearance from Spanish roots, and then I’ll show how that is tied into the racist culture of slavery in America, and ultimately, the completion of the shift in meaning.
The root word from which the N-word springs is the Spanish negro, meaning black. It was simply that – a colour. It’s important to remember this, as it had no correlation with the English word Negro used to describe black Americans. In the sixteenth century, the Spanish negro was adopted by the English, becoming neger, before morphing into the American English N-word sometime later. The first records of the word in America are from 1689 in an estate inventory in the region of modern day Brooklyn. My source on this(at bottom), is from 1967 however, and an earlier form occurrence may be known.
So now we have the existence of the N-word in American English, and its roots in the Spanish word for black. Time to focus on the slavery aspect of this, and the racial connotations which now surround the word and how they came in to being.
Slavery was justified through the belief that blacks were an inferior type of human to whites, and this was backed up with pseudo-scientific proofs such as phrenology(the measurement of the skull to gauge intelligence and/or moral character). In this way Africans in America were subdued by whites, and were portrayed as being of lesser intelligence, of lower moral character, and physically built for the manual labour that slavery consisted of. These stereotypes were later followed by others, one example being the image of black people as having heightened sexual appetites – often uncontrollable – which led to the fear of interracial rape. These stereotypes were essential to the power dynamics of slavery because they created fear and hatred of the black population. This is where the N-word came in. Originating from a word meaning black, it became a catch-all word for black people in America, regardless of their status as a freeman or a slave.
Rather than describing their colour, it became a categorising word, separating them from people and marking them as lesser animals. It dehumanised them, and relegated them to a lower position in life – that of a subservient labourer. The N-word came with derivatives too. A N-lover was someone who supported the emancipation or rights of black slaves. A N-heaven was the balcony of a theatre during segregation. A N-head was a hard rock, referring to the pseudo-science phrenology and its beliefs that blacks had thicker skulls than whites(and consequently less room for their brains). It was accompanied by other words which retain their derogatory nature today, such as coon. Others, like ‘boy’, used to lessen the status of a black slave by implying childlike tendencies, have alternative meanings today, but if used by whites to refer to a black person, will still have their offensive undertones.
The offensiveness of the word today is no lesser when used by white people to refer to black, as it still recalls those derogatory origins in slavery, where it was used only to dehumanise and categorise. It has been described as a shared experience for African Americans, something they have all gone through, much like all black people in the nineteenth century experienced some form of racism. While the words negro, coloured, and others were all used well into the twentieth century by white and black alike, the N-word was loathed by African Americans. An article from 1944 refers to incidents of magazines being boycotted because of their use of the word, of the black upper and middle class abhorring the word even while the lower class used it. This suggests that the word retained its connotations to racism and slavery much more than others, especially when it was the more successful African Americans who would refrain from using it.
EDIT: Adding sources now. They don't seem to be publicly available, which I apologise for. I tried Googling the Henderson article, but even that is behind paywalls.
'What's in a Slur?', Anita Henderson, American Speech.
'Designations for Colored Folk', H. L. Mencken, American Speech, at Jstor.
'From Slavery to Contemporary Genocide: A Literary and Linguistic Analysis of Why American Blacks Deserve Reparations', Regina Jennings, Gender & Class, at Jstor.
'An Antedating of the N-word', Geoffrey Needler, American Speech, at Jstor.