I'd read it verbatim. I'd probably not mention it further unless it seemed to be causing some confusion or concern on the kids part.
Meh..I'm of that mindset, too. I don't really care if she runs around yelling "Come on darkies!" when she's playing around the house. When she's playing with her friends at school, I think it could put her in an awkward position. We have an understanding that language is a tool and there are no "bad words" if she wants to say "fuck" when it's just the two of us driving in the car, that's fine. Obviously it's not going to go over well at school, and we explain that. There haven't been any issues. The thing is in this particular context, it's easier to just edit a non story related word of phrase that will go from "hey 'darkies' is one of those words other people might get upset about if we say it, ok?" to:
"Because it can be mean to people with dark skin"
"Why is it mean? They do have dark skin"
"Well, would you like it I called you Lighty?"
"Ok that's a bad example"
"So it's a bad word?"
"Yes, it's one of those"
"Why do the Narnians say it?"
"They're angry at the Calmorenes"
"So I can say it if I'm angry?"
"You can say it if Calmorenes invade our town and capture the talking animals"
"Hey, it's midnight."
Edited, Jan 23rd 2013 10:47am by Smasharoo