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Honestly, I would say white, because you are basically half white.
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So what? So is Barack Obama. Race is a little more complicated than fractions.
As of a few years ago, the Common App had an "enrolled" question to answer if you put "Native American", so you could put Native American but that you weren't enrolled in a tribe. Does it not still have that? It also had a blank for you to enter a tribe if you wished.
I would say that "Original Peoples of the Americas" includes indigenous Mexican, yes. That wording is usually intended, from what I have seen, to make sure that indigenous Central and South Americans are included.
Also, the Common App lets you check multiple boxes, so you can check as many boxes as you identify with. If there's a space for entering a tribe, you could use that to specify indigenous Mexican (or, if you know your grandfather's tribal background, you could put that), and let colleges interpret it as they will.