Octaroon?

I had never heard that term before and I had to look it up in a dictionary. For the record it means some one who is one eighth black.

The first time I saw this movie I thought that the scene at the dinner table where the Bridges character claims that his entire family are octaroons I thought he was just making a joke to make his relatives uncomfortable. On a second viewing I'm not so sure. The behavior of the family is very odd, no one actually disputes him on this. Later there is a scene where he meets a light skinned black woman at a dance and mistakes her for white. She says that if he wasn't sure he should have asked.

The irony of the movie is that every single black person he meets just assumes he is white. No one ever asks him directly. One of the themes of the movie is the arbitrary nature of race. No one is completely black or completely white.

Does anybody else see the movie that way? Or am I completely on my own in interpreting it this way?