I don’t like the term Hispanic, I prefer Latin American. However, my husband, who is Mexican, does not mind Hispanic. He is a quarter Spanish, but his name and the majority lf his lineage is Sephardic Jewish, and his paternal grandparents came from Israel to Mexico. His father was born and raised in Mexico, so on the census we count him Hispanic, but he is 100% family from the middle east, parents emigrated directly from Israelto Mexico, generations before that they may have lived in parts of Lebonan or Syria it is unclear. I feel the appropriate “labels” for my husband are Latin American or Mexican, and now American, seeing he is a citizen here in America now.
They way I look at it is the lables come from marketing companies and government needing to group people for demographic and psychographic generalizations, plus we use these labels for short hand. A way of communication a generalization about someone or some group in one word, and whichever word catches on and is decided to be acceptible comes into use.
Take the term African American, we use it to describe black people in America. But, I know several white Africans, and I know many black people who strongly identify with their former country before coming to the states, Jamaican, Haitian, and other Islands, and even the majority of my black friends who have been here for generations, great grandchildren of slaves, prefer black.