Excerpted and edited from tokenadult's thread:
No college in the United States requires an applicant or student to self-identify with any race or ethnic group.
Self-identifying ethnicity is OPTIONAL on the Common Application,
which is what many colleges use as their main or sole application form. Self-identifying ethnicity is also optional on the Universal Application, which various colleges also accept. Every college in the United States is required by federal law to track requested ethnic data on students based on student self-identification. The colleges have to ask for these data, and have to report them to the federal government, but students don't have to self-identify with any ethnic or racial category.
Don't worry about it. Self-identify or not as you wish. Recognize that students from a variety of ethnic groups--including whatever group or groups you would identify with, if any--are admitted to each of your favorite colleges each year. On the other hand, admission to some colleges is just plain competitive, so lots of outstanding students self-identified with each ethnic group you can imagine (or not self-identified with any group) are not admitted each year. Do your best on your application, apply to a safety, and relax.
Ethnic Categories Reported by Colleges Are Defined--Vaguely--by Federal Law
College admissions offices refer to the U.S. Census bureau definitions for ethnic categories, which are based on regulations from the Office of Management and Budget, because they required to report by federal regulations,
"Definition of Hispanic or Latino Origin Used in the 2010 Census:
Hispanic or Latino” refers to a person of Cuban, Mexican, Puerto Rican, South or Central American, or other Spanish culture or origin regardless of race."
"Hispanic origin can be viewed as the heritage, nationality group, lineage, or country of birth of the person or the person’s parents or ancestors before their arrival in the United States."
"People who identify their origin as Hispanic, Latino, or Spanish may be any race."
The federal Department of Education National Center for Education Statistics (NCES) has posted guidance to colleges about how they are to ask about student ethnicity and race according to the federally defined categories.
By next year (2009), this aspect of college application ethnicity questions will be a little more clear, because questions will first ask yes/no about Hispanic ethnicity, and then ask students to "choose one or more" of the federally defined "race" categories. It will still be a student's legal right not to answer the questions at all, but the questions will no longer say explicitly that they are optional.