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Is using the term "mafia" around an Italian community considered an insult?

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Ok I was out with my friend today at the little Italy days down at Bloomfield in the Pittsburgh area and I used therm mafia not loud so people could hear but my friends dad heard me and he said don't use that word around here ok? It's not a good word for Italian people. Then I said it to my friend for a second time and he told me don't use that word ever again around this area because people I was walking pass by had Italian blue shirts and and green shirts with the Italian flag on it. I didn't say mafia obviously on purpose I just didn't know it was insulting to Italians. And I'm embarrassed because I'm 24 and I should know what all ethnic slurs are for different countries.