The term ‘farang‘ (often pronounced as ‘falang‘) is a general term used by many Thais when referring to Caucasian visitors. The exact derivation isn’t clear with some experts stating that it is a contraction of the Thai word ‘farangset‘ (French) as the French were present in Siam and Indochina in the 17th Century. Others believe it pre-dates this and derives from ‘faringsi‘ (Persian) when Persian traders were prominent in the region.
The term is widely used today and not just by Thai people, but also by Western expats and long-term visitors to Thailand. Generally speaking, it isn’t meant as a form of abuse. I’ve had friendly disagreements with other expats about the use of the term. Some insist that ‘good’ Thais never use the word ‘farang’ when talking about foreigners. I don’t agree with that assessment, but I do agree that there are times when ‘farang’ can be used in disparaging fashion.
I don’t think it’s something to get too hung up about if you are visiting on holiday or vacation. If a Thai person doesn’t know your name they may call you ‘mister’, ‘mam’ or ‘sir’. On the other hand, if you have lived here for two years and your partner’s friends call you ‘farang’ to your face rather than your actual name (preceded by the polite title ‘Khun’) then something is definitely wrong!