Language can be political. It always has been, and that is clear in how people referred to African Americans in the civil war era. Let's start with one end of the spectrum, the slavocrats.

(Note, I think it's permissible for me to type the "n word", since we are discussing its historical use and implications, and to skirt around it or clunkily say "n word" every time would be cumbersome and distract from the historical analysis. I understand the word is seen as deeply offensive, thus the following paragraphs could seem shocking to some readers. I do not use the word in an offensive sense, nor do I mean to insult anyone. Since I'm neither Black nor American it is not my place to judge whether it's appropriate to use it here. If it is not, I will edit the post).

Slaveowners, having already robbed people of their liberty, did not hesitate to rob people of their dignity as well. So whenever they felt like it they would use the vulgar and hurtful expression "nigger" for Black people. The word was already recognized as being a vulgar slur. A teacher of the Freedmen's Bureau was dismissed for using it, for example. However, since it was considered a vulgar expression, it was not used by the actual creme de la creme of Southern society. Some slaveholders, deigning themselves good masters, used relatively more polite terms. Well, as polite as you can be with a person you own. "Negro" (plural, "negroes") was commonly used as the regular but not vulgar term for Black people.

Alexander Stephens, for example, used it in his infamous cornerstone speech. He deigned himself a distinguished gentleman after all, and a vulgar word like the "n word" would not suffice for that. "Negro" was, it seems, the most common word for African Americans. Slave auctions advertised "negroes for sale" and slave catchers put out posters asking for "fugitive negroes"; in Congress, the issue of "Negro slavery" was discussed, and the Dred Scott decision talked of the "Negro race". Abraham Lincoln and Stephen Douglass debated not about Black or African American men, but of "the Negro" and his place in the United States.

Negro, thus, was the most common term. It apparently was not seen as degrading, for even anti-slavery men used it. Instead, it was a regular word, adequate for political speeches, Congressional bills and Supreme Court decisions. Even Frederick Douglass used it. Nigger, by contrast, was absolutely recognized as a crass, vulgar and hurtful word, equivalent to swearing. Of course, people still used it regardless, since they felt they owed no respect to Black people. But it had not acquired its complex implications yet. It was vulgar in the same way that saying "fuck" or "shit" would be. It was simply improper, rather than wrong to use nigger to refer to Black people. Consequently, political campaigns freely used that despicable word, such as Democrats who paraded asking for "the Union as it was, the constitution as it is, and the niggers where they are." Soldiers, too, talked of "stealing all the niggers" of the rebels; the Charleston Mercury predicted that if Black soldiers were recruited for the CSA, the poor man would be "reduced to the level of a nigger."

Even abolitionists and staunch anti-slavery men used nigger in occasion. Lincoln used it privately and for jokes; Ben Wade, a Senator characterized by his bluntness and radicalism freely used the word even though he was a supporter of Black civil rights. But Republicans who wanted to show more sympathy and tact had other choices available. "Colored man" is basically the most respectful term a Black man could expect in that era. "Colored", in this case, was an adjective that could be used with other nouns. For example, "colored woman", "colored folks", "colored soldiers". It harkens to French and Spanish tradition, where Black people would be referred to as "gens de couleur" or "gente de color".

"Colored" seems to have been considered to be a more respectful version of "Negro". The only comparison I can think of is using "Black man" or "African American man" nowadays. But it was indeed more formal and respectful, and politicians sympathetic to African Americans used it much more often. Thus you have the "Colored Orphans Asylum" or the "US Colored Troops". Frederick Douglass asked for outrages against the "colored people" to cease; Salmon P. Chase demanded an end to "prejudice against color"; and Lincoln, too, praised the "colored soldiers" in the Union armies and timidly asked whether some "colored men" might be allowed to take part in the reconstruction of Luisiana. "Colored" remained for many years the preferred, respectful term for African Americans. You can see it in how Black American associations used the word, like the Colored Labor Union or the famous National Association for the Advancement of the Colored People.

It's in the use of colored that you can see the political implications of language most clearly. I can hardly find any Confederate using "colored" in any way. Since "colored" is an adjective, it would put an emphasis on the humanity of the person. It's easier to justify slavery when you have white people in one side and negroes on the other; it's harder when you have white people and colored people. The use of colored thus is almost entirely contained to the Union and its people, while Southerners only used negro, because it emphasizes African Americans as a separate, distinct group. It's the same reason why nowadays using "Black" as a noun is frowned upon ("the blacks" vs "Black men"). It is part of a wider pattern of dehumanization, like addressing an adult Black man as "boy" or refusing to use "Mr" or "Mrs" when talking with them.

In the same vein, "the African race" or simply "the African" was another term sometimes used, which emphasized that the Black population was foreign and did not belong in the US ("African American" would not appear till later). "Black", as both an adjective and a noun, was frequently used as well. It seems to be about as common as Negro, and used as a synonim of it. "Darkey" was popular in minstrel songs, though apparently not that commonly used by common people. "Freedmen" or "contraband" bear mention, though they referred to the status of the person, not his ethnicity. "Of color" was also occasionally used, as a term equal to "colored"; "colored" was also used as a noun, such as talking of the "coloreds".

In general, "Negro" and "Black" were the most common terms, considered normal words adequate for both formal speech and everyday talk. "Nigger", though recognized as hurtful and vulgar, did not carry its complex modern implications because people simply did not care enough. It was often used in political campaigns, everyday speech and newspapers, but people of "higher status" shied from it (like Stephens or Davis, who use "negroes", not "niggers"). It was certainly not adequate for laws or judicial decisions, while both "Black" and "Negro" were. But the term Black people preferred, and the one considered the most respectful and adequate, was "colored", used as an adjective. In this case, I can only find Republicans and anti-slavery men using it, while Confederates seemed to have rejected its use entirely because of its political implications.