It has since seen some use as a replacement of what used to be called race; for example, the Asian Americans can be described as "a panethnicity" of various unrelated peoples of Asia, which are nevertheless perceived as a distinguishable group within the larger multiracial North American society.
More recently[year needed] the term has also come to be used in contexts outside of multiculturalism in US society, as a general replacement for terms like ethnolinguistic group or racial group.[clarification needed]
The concept is to be distinguished with that of "pan-nationalism", which similarly groups related ethnicities, but in the context of ethnic nationalism and usually irredentism (for example, Pan-Arabism, Pan-Turkism, Pan-Iranism, Pan-Slavism, Pan-Germanism, Pan-Celticism, Pan-Africanism).
Panethnicity has allowed for Asian Americans to unite based on similar historical relations with the US, such as US military presence in their native country. The Asian American panethnic identity has evolved to become a means for immigrant groups such as Asian Americans to unite in order to gain political strength in numbers.
Panethnic labels are often, though not always, created and employed by outsiders of the group that is being defined panethnically. Mainstream institutions and political policies often play a big role in the labeling of panethnic groups. They often enact policies that deal with specific groups of people, and panethnic groups are one way to group large numbers of people. Public policy might dole out resources or make deals with multiple groups, viewing them all as one large entity.
In both the case of "Hispanics" and "Latinos", the categorization into a panethnicity is applied irrespective of the country of origin (such as Mexican, Peruvian, Argentine, Dominican, Spaniard, etc.) or the racial origins (white, mestizo, mulatto, black, Amerindian) of those people grouped into the panethnicity.
Other US examples include the labeling of all people from not only East Asia, but also South Asia, as Asian Americans, or (reflecting the so-called "one-drop rule") all people with any degree of sub-Saharan African descent (even if predominantely of European or other ancestries) as African American, and all indigenous American tribes as a collective Native American "ethnicity" with the implication that they represent one people with a single shared identity.
- Asian American Panethnicity: Bridging Institutions and Identities; reference for Espiritu as originator of the term: Asian Pacific American Law Journal vol. 2 (1994), p. 43 "I use the term "pan-racialization" as the general equivalent of Professor Espiritu's term 'pan-ethnicity.' Espiritu uses Asian American 'pan-ethnicity' to describe an over-arching Asian American ethnic identity constructed in the 1960s"
- "Institutional Panethnicity: Boundary Formation in Asian-American Organizing", Dina G. Okamoto