According to history it was a term first used by rich white plantation owners and government heads to discourage lower class white citizens in the 1800's, they were called this because all they could buy was flour and water and made cheap bread with the ingredients forming a large cracker. Slaves on the plantations were encouraged by slaver drivers to call these lower class citizens who stole crops.

Today it is used mostly by black individuals to make fun of white individuals. Though dosent have as much impact as its cousin word "Nigger" (cuz white people weren't mass enslaved in America)

A cracker is a white person, generally southern and specifically Florida, southern Georgia and Southern alabama.
It is used to describe rural folk who homesteaded theses states and lived hard lives, in mostly agrarian roles. Cattle driving was one of their main occupations, the "Crack" of the Cattle,not slave whip (rarely did they own slaves, and were as poor as any slave) was from where they got their name. It is said the "crack" could be heard for nearly a mile. The name cracker was synonymous with thier food, architecture, way of making a living as well as the people themselves. Today the word is used to descibe any southern white person, mostly used in derogitory terms, as meaning rural poor country folk by those who could not be considered crackers. The term is not as negative as redneck or hick.