The term "Latino" refers to any person having Latin American background and is often taken to be a synonym with "Hispanic". However, while official use of the term Hispanic has its origins in the Census Bureau in the 1970s, activist groups such as MEChA, Crusade for Justice, Brown Berets, Black Berets, and the Young Lords often preferred the term Latino because they felt it is more inclusive of the broad range of peoples in Latin America.

Other groups such as the Mexica Movement reject the label entirely and describe it as a racist term that denies indigenous identities. The group states that "Latino" falsely lumps together people of different races merely because they have been colonized by Spanish Europeans. However, those of European Spanish descent, even when born in Latin America, may prefer the term Hispanic. "Latino" is typically contrasted with other U.S. groups, e.g. European American and African American. It is often incorrectly given racial connotations.

The term "Latino" is typically understood by some to mean immigrants from Hispanophone countries in North, Central and South America and their U.S.-born descendants. It refers specifically but not exclusively to persons of Latin American origin. People from Spain self-categorize as latinos in the Spanish language, but in that case it means "Latin," rather than 'Latin American' or 'US citizen or resident of Latin American origin' (a 'Latin American American', in other words), as the Spanish are one of the Latin peoples of Europe.

Inhabitants having a background in countries of the Western Hemisphere where other Romance languages are widespread (such as Aruba or Haiti) are usually thought of as "Caribbean" or "West Indian" rather than "Latino," since they neither speak Spanish or Portuguese nor share in the Spanish or Portuguese culture. Inhabitants of French Guiana and the French West Indies, for example, are often thought of as having more in common culturally with their English-speaking Caribbean neighbours than they do with residents of Mexico and Central and South America.

The English language does not usually distinguish between the male and female genders. This leads many native English speakers to say Latino when referring to a woman. Some see this as incorrect, as the Spanish form "Latino" is male. Some speakers, especially those with knowledge of Spanish, will use the correct Spanish form Latina when referring to a female.

Latino in some of the Romance languages, such as Italian, Portuguese and Spanish, literally means a person from the Lazio (ancient name: Latium) region in Italy, as well as a member of any of the modern European Romance-speaking nations or peoples.

It must be emphasized that "Latino" in English and "Latino/latino" in other languages, though related, have different meanings and are different words. The Spanish adjective latino (feminine: latina) directly translates to English as "Latin", not "Latino". The dictionary of the Real Academia Española defines ten senses for latino, which can refer to Lazio in Italy, the Latin language, and any of the Romance-speaking countries and peoples in Europe or America (Latin America). In Spain, Puerto Rico, the Dominican Republic, and Cuba, the term latino directly translates into Latin[citation needed]. Spaniards view themselves as being Latins, the same as Italians, Romanians, French, and the Portuguese. The term Latino or Latin does not refer to race. It is also worth mentioning that in Spanish these terms are by convention not capitalized as they are in English.

Most people in Latin America consider "latino" to be a culture or a lifestyle to some degree, which includes Brazil as well as Spanish-speaking countries in the region. Many Latin Americans therefore describe themselves as "latino" whether they are of white, black, Amerindian, Asian, or mixed descent.