Naco is a slur used to describe Hispanics in a derogatory way. Native Mexicans. Used as an insult by city dwellers on indigenous, small town inhabitants or vulgar people even from the big city.
The word Naco is a racial slur that has been used historically to degrade and dehumanize hispanics. The word is still used by some people for this purpose, and it is seen as offensive and hurtful to hispanics. If you are unsure about whether or not it is appropriate to use the word Naco, it is best to err on the side of caution and avoid using it in any situation.