Yesterday on Craftster I saw a thread in which a couple of people seemed to have some discomfort with the term "fagot/faggot stitch", a knitting stitch pattern which I must confess I'd never heard of, although I've long known the similar sewing term--and, for that matter, the original stick term and its use in shortened form to refer to cigarettes in England, as well as the pejorative term these posters wanted to avoid seeming to say. Laudable as their desire not to give offense may be, I have a comment.
Item: My mother has told me how, in her youth, her teenage brother used to upset their preschooler nephew mightily by accusing the nephew of "peering out the window". The outraged child would be driven nearly to tears as the older boy asserted that he'd "seen him do it".
Item: Supposedly there was a politician back in the '30s who "attacked" his opponent by telling voters that the opponent's sister was a known thespian and that the opponent and his wife had practiced pre-marital celibacy. Ignorant voters drew the (intended) conclusion that the opponent and his family were immoral and supported the accuser.
People who get offended by words that happen to sound like other, offensive words are like my preschool cousin and those voters: they are betraying their ignorance by getting upset over inoffensive words they don't understand. Actually, many of them are even worse off than my little cousin and the uneducated voters, because my uncle was deliberately trying to annoy my cousin and the politician was deliberately trying to mislead the voters. A city councilman or teacher who uses the word "niggardly" to describe something that is niggardly is not trying to mislead or offend anyone. A person who uses the word "faggot" to describe a bundle of sticks, "fagoting" to refer to a certain decorative sewing technique, or "fagot stitch" to refer to a particular knit stitch pattern is not intending to mislead or offend anyone. To insist on being offended in these cases where there is no offense and no intent to cause offense is either to show that you are ignorant or to show that you are determined to be offended even when you know there's nothing to be offended about. Better vocabulary instruction in the schools could help with the former, but I don't know if there's anything that can help the latter.