In standard English, piccaninny is a derogatory word for a black child. In some dialects, specifically some Caribbean dialects, the word does not have the derogatory connotation and can even be a term of endearment, but this is not the case in standard English.
This word is a West Indian variation on the Portuguese pequenino, meaning boy or child and in older use meaning small or tiny. The Portuguese word is cognate with the Spanish pequeño. The word entered the West Indian vocabulary via Portuguese trading pidgins that were common in the Caribbean of the 17th century.
English use of the word dates to the mid-17th century. There is this from 1653, published in Notes & Queries in 1905, referring to workers, presumably slaves, in Barbados:
Some women, whose pickaninnies are three yeares old, will, as they worke at weeding...suffer the hee Pickaninnie, to sit astride upon their backs.
By the early 19th century, the term had spread to Australia and New Zealand where it was used to refer to Aboriginal and Maori children. From the Sydney Gazette of 4 January 1817:
Governor,—that will make good Settler—that’s my Pickaninny!
And from J.L. Nicholas’s Narrative of a Voyage to New Zealand, also from 1817:
This fellow...met me...telling me that Mrs. King had got a pickeeninnee, (a child,) he began to describe her groans...while...under the pains of labour.
(Source: Oxford English Dictionary, 3rd Edition)
Copyright 1997-2013, by David Wilton