"people of color" just sounds like a hoity-toity holier than thou aint i fucking enlightened way of saying "colored people".
linguistically, there is absolutely zero difference. one version is not morally superior to the other except in the confused mind of the speaker
either way of saying it demeans the individual by assigning them to a certain group of predetermined and scripted identity traits which have no real basis in reality - what vonnegut called a "granfalloon".
If you wish to examine a granfalloon, just remove the skin of a toy balloon. — Bokonon
from wkipedia
"The most commonly purported granfalloons are associations and societies based on a shared but ultimately fabricated premise. Examples from Cat's Cradle include: "the Communist Party, the Daughters of the American Revolution, the General Electric Company—and any nation, anytime, anywhere."
A more general and oft-cited quote defines a granfalloon as "a proud and meaningless association of human beings."
Another example of a granfalloon cited in the novel was Hoosiers...."
"My God," she said, "are you a Hoosier?"
I admitted I was.
"I'm a Hoosier, too," she crowed. "Nobody has to be ashamed of being a Hoosier."
"I'm not," I said. "I never knew anybody who was."