Yup. Any Native American activist who tells you “squaw” is hate speech is a hater of the beauties of Native American languages.
“Sqw-” is a pretty common root in Algonquian languages for “woman.”
From The Lasting of the Mohegans, by Melissa Jayne Fawcett, via Language Log:
The Mohegan word for woman is “shquaaw” and red is “squayoh”. Blood is referred to as “(um) sque” which also has a related “squ” root. So is the name of Granny Squannit, leader of the Makiawisug (Little People of the Woodlands). The root of her name describes her very clearly. “Squa” mean woman, blood, red, or of the earth. The root “anit” comes from “manit” or “Manitou”, often spelled as “mundu” is Mohegan-Pequot, which means Spirit. Therefore, Granny Squannit’s name means “Spirit Woman” and implies a connection to the earth and blood.
The reason that English and French speakers called Native American women “squaws” is that the tribes they tended to encounter first, like the Maliseet-Passamaquoddys and the Pequots, used the word “squaw” as their ordinary word for woman or young woman or wife. This isn’t that hard, and there’s no reason that placenames like “Squaw Lake” should be considered offensive. If you wanted to name it after the local tribe’s word for woman, that might make sense too. But doing like Maine, and changing every “squaw” to “moose” would seem to be a lot more offensive to women than letting it alone.
Now, that doesn’t mean you go around calling every lady with a reservation license plate or a Native American surname a “squaw,” any more than you should call every lad on earth with an Irish name, “bucko.” (Which is a lot easier than spelling it “buachaill.”) Also, not every tribe in the US and Canada speaks an Algonquian tongue, so it would be stupid. But it’s not even vaguely the same as calling somebody c–t, which was the urban legend going around.
The Wikipedia page on “squaw” has been rewritten by linguists, so read it now while it’s still sensible.