Nobodys being racist. If anyones born in their country then they are a native of that country. "Native American" has been co-opted by politicians and political movements and twisted to mean only a certain type of person born in this country. But everyone knows if you are born in a country, no matter your skin color or ethnicity, then you are a native of that country. Native French, Native German, Native Australian all mean a person born in that country but when someone says Native American then all of a sudden it only means a certain type of American born here. Baking Soda is still baking soda even though no one uses it as baking soda anymore.
If they want to be called Navajo, Comanche etc then thats a lot better than Native American since the actual meaning has been twisted over the last century.