It's used to replace other terms that were/are being used, but the term itself was made by first nation people.

So, because the term was coined by people to refer to themselves, it's not really a colonial term, even if it's often used in place of other "colonial terms".

Also, the old terms used to describe the non-eurocentric gender/sexual roles often. had roots in words from the language of one of the first nations, they were just being applied to multiple groups from multiple languages, and sometimes the root they used was for something like a prostitute.

Like everything else, it's messy and complicated l, and basically any answer is at least a little bit wrong.