noun: As you can see, this word was not made up by the US government, but it has Latin -as in the language romans used- roots.
Hispanic reffers to everything that's related with the culture, language and people of the former roman province of Hispania: what is Spain & Portugal right now, and Spanish & Portuguese as it's languages.
It doesn't specify any race, it relates to the descent. In most part, any person born in South-America in the last 400 years carry genes of the SouthWestern-Europe colonizers (Spain & Portugal in most part, with some small colonies from the Netherlands & France), but yet Spain & Portugal born people are mostly a mix of Mediterranean ethnicity, and Latin-American born are a mix of that with original Amerindian descent.
Hispanic culture is very rich because it's diversity, and one of the most clear characteristics of it is patriotism, Hispanics are proud of what they are. There are more common characteristics that can be identified in Hispanics.
(Argentina was a common migration point from Spanish population during the civil war and later on)
"Hispanics are very charming"
(Normal Hispanic families puts a big effort in educating kids to be like this, for one reason or another)
"Hispanics make good lovers"
(Amerindian culture had a strong belief that women were divine, in opposition to Anglo-Saxon culture that was rather discriminating agains women in the most part. This may have "touched" things as time has passed.)
"Paula is from Madrid, so she's Hispanic"
"Ricardo is from Mexico, so he's Hispanic"
"Because Paula is from Spain, it doesn't mean she's a latina, but Ricardo IS a latin."
Most Hispanics, who choose to do this anyway, do so because it is the only label generally accepted by the various peoples and nations of Central and South America.
The label Latino is considered inappropriate to Hispanics because it more closely identifies with Mexicans specifically.
Other labels like "Mestizo" (bastard child) are derogatory in nature and generally unacceptable.
Hispanics understand that each sub-region in Central and South America is unique in culture and mixture of race - even though they each share many similarities. Hispanics are considered human hybrids and take pride in having mixed blood. They are racially open in sexuality and highly accepting of diversity.
The label serves to describe both a culture and a race and not a language. As such, it is also possible for a person to speak none of the language and know none of the culture, but still be racially "Hispanic".
Because it can be hard to identify them, being "Hispanic" can be a matter of opinion. The only truth is that Hispanic people are racially and culturally diverse.
As a general rule, if you are of mixed ancestry and you think you fit into the general description above, you are most likely a member of the Hispanic race.