From The New York Times:
“Squaw” originated in a branch of the Algonquin language, where it meant simply “woman,” but it turned into a slur on the tongues of white settlers, who used it to refer derisively to Indian women in general or a part of their anatomy in particular. The settlers liked the word so much that there are now more than 170 springs, gulches, bluffs, valleys, and gaps in this state called “squaw.” All must be renamed under a 2001 law that was enacted after two members of the confederated tribes persuaded the Legislature that the word was offensive to many American Indians and should be erased from maps. But only 13 places have been renamed so far. It is a problem familiar to Indians and government officials in several states where attempts to outlaw “squaw” have been caught in a thicket of bureaucratic, historical and linguistic snares.
In Maine, one frustrated county changed all “squaw” names to “moose” in one fell swoop to save on hassle, while in Minnesota, disgruntled residents suggested new names like Politically Correct Creek and Politically Correct Bay. But often the stumbling block has been questions over what Indians themselves would prefer instead of “squaw.”