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Personally, I'm not offended by it, since I think its usage was inspired by the states North and South Dakota (which are both named after the tribe) rather than the tribe itself. From what I've heard, North Dakota and South Dakota are both beautiful places. I don't care for the name, though. (A lot of places in the US seem to be named after tribes.) I think of Dakota going more along with names like Montana, Indiana, and Arizona.

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Ethnic names as personal names aren't exactly a new thing. Sabina is derived from the Sabines, and Judith is derived from the Judeans.