"I should explain to your Lordship what is meant by crackers; a name they have got from being great boasters; they are a lawless set of rascalls on the frontiers of Virginia, Maryland, the Carolinas and Georgia, who often change their places of abode." 1766, G. Cochrane
2. In more general and contemporary U.S. usage, the term has become an ethnic slur for all Americans of Northern European decent.
2. Shut up, cracker, 'fore I beat yo' scrawny white ass.
Black guy: Move cracker
Black guy (now with gun): What!!!