Well personally I think it IS derogatory to be called a Caucasian. I am not from the Caucasus and neither are any of my ancestors. Further, being called White is derogatory too!! I am not white skinned, but more of a pinkish brown! So stop it now before I get really MAD and cry!!!!
I prefer to be called a Scotish, German, Dutch, French, Cherokee American!! Cuz that is what I AM!!!!
And my wife is neither Asian nor Oriental! She is a Malaysian, Chinese, Filipino, Spanish soon to be American.
On a serious note:
Actually anyone east of Europe can be considered an Asian and those called Asian are actually Oriental if they are from south of the Himilayas, including the Malay Archipelago as far south as the Philippines! So actually Chinese, Korean, Japanese, Mongolian are not Orientals at all by the descriptive term, but are Asian. But also Arabs, Persians and Indians are technically Asians as well!
The source of derogation is from the intent or attitude of the individual and not the words they choose. The word chosen is only derogatory if the user intends to derogate with the word. If the word user means no offense or does not intend to be derogatory and the hearer takes offense it merely reveals their own immaturity and low self-esteem!