From what I've read, it's more that "colored people" mostly only referred to black people in the United States, whereas "people of color" refers to all non-whites (except asians may or may not be included in "people of color" depending on whatever is more convenient at the time).
"People of color" has always sounded bad to me. It follows the <noun> <preposition> <noun> pattern, with "people" and "color" being both nouns. It sounds to me as if it emphasizes the group, not the individual. To emphasize the person, rather than the group, I think <adjective> <noun> is better.
"People of color" has always sounded bad to me. It follows the <noun> <preposition> <noun> pattern, with "people" and "color" being both nouns. It sounds to me as if it emphasizes the group, not the individual. To emphasize the person, rather than the group, I think <adjective> <noun> is better.