Nig is the fifth level on the scale of blackness, which defines a sort of neutrality between being black and white. They are the offspring of a black parent and a white parent.
The scale of blackness goes in order as follows:
Basement Dweller, White Trash, White, Cracker, Nig, Sweet-Grass Basket Maker, Black, Nigger.
Nigs are also known as: mulatto, Blackrican-American, whack, or, a half-assed nigger.
"That kid's sure lucky he's a nig, or I'd beat his ass for saying nigger." (Couldn't come up with a better example, sorry).