Why is the word "******" offensive?

I'm white and I like black people. I don't understand how it's offensive. The only answer that i can come across is that a long time ago someone meant it to be offensive. I researched the etymology of the word and seems to be a variation on latin/spanish words for "black." Finally, I don't understand why, if it's terribly offensive, black people use it between themselves. If it was left alone it would have faded into obscurity. I know it's alot to ask to get an intelligent articulate answer to this question but please clear this up for me