A casual American or Canadian corruption of the term "Indian", referring to Native Americans. The earliest Europeans thought they had landed in India and applied "Indian" to the indigenous population. "Injun" more commonly heard during a period when the term "Indian" was used, often pronounced in later years only by children. Not typically meant as derogatory, as American "Indians" came to be admired during the latter period of common usage. Rarely used today, if so used in a typically light-hearted if politically-incorrect fashion. Can be derogatory given intent and inflection.
Uh-oh, we are entering Injun country!