In the African American community, there are many discussions around what has historically been called the "One Drop Theory." Unfortunately, it is extremely racist and yet has held through time. I hear it discussed on talk shows regularly on the AA radio station where I have my show. This is how it goes.

Decided to take it from the internet instead of explaining so that I don't make any mistakes.

One-drop Theory

The one-drop theory (or one-drop rule) is the colloquial term for the standard, found throughout the USA, that holds that a person with even one drop of non-white ancestry should be classified as "colored", especially for the purposes of laws forbidding inter-racial marriage. This standard has also been applied to people with Native American ancestry. One-drop theory is still influential in the USA - by de facto American color standards, a multiracial person with black heritage is considered black unless they declare themselves otherwise, identifying instead as white, mixed-race or Native American, for example (different color standards can be seen in countries such as Brazil). These standards are widely rejected in the Latino community in the USA, the majority of which is mixed race. The theory was codified in law in some states, although the expression colored was often used, at least acknowledging the presence of non-black ancestry. For example, as cited in the Loving v. Virginia decisionhttp://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&navby=case&vol=388&invol=1&friend=oyez, Virginia law (Racial Integrity Law of 1924) held that for the purposes of laws forbidding inter-racial marriage, "Every person in whom there is ascertainable any Negro blood shall be deemed and taken to be a colored person, and every person not a colored person having one fourth or more of American Indian blood shall be deemed an American Indian; except that members of Indian tribes existing in this Commonwealth having one fourth or more of Indian blood and less than one sixteenth of Negro blood shall be deemed tribal Indians."
Alternatives to the one-drop theory

As an alternative to this theory, various terms were coined during the 19th century to denote persons with varying degrees of African ancestry; these terms included mulatto for one-half black, quadroon for one-quarter black, octoroon for one-eighth black, and quintroon (or much less commonly, hexadecaroon) for one-sixteenth black. Other such terms include sambo, metif, mustee and sang-mele. These terms are rarely used today. Black Americans also use many slang terms to describe the varying shades of skin tone found among them, including chocolate for a dark-skinned African-American and high yella for a light-skinned one. It should be noted, however, that skin-colour is not exclusively determined by racial ancestry.