A phrase taken from Mao's Little Red Book to describe terminology that is considered politically expedient.
Understood from a Western perspective as having the same connotation as the term Double Speak in George Orwell's novel 1984, which was written as a criticism of Communism at a time when Western powers were still allied with the USSR.
This western application of the term is often misused by uneducated morons in America to justify their refusal (or inability) to learn basic concepts, correct terminology, accepted behavior or even rudimentary spelling and grammar.
"I'd like a cheeseburger with a side of politically correct Freedom fries".
During World War I, referring to German measles as Liberty Measles was considered politically correct.
Prior to the Invasion of Iraq, it was considered politically correct to assume that the President wasn't a complete idiot.