I think it's abusive not racist. But times have changed, when I was at school and later a teacher name calling such as spastic, pleb, cretin, prossy, gippo, 'flid' were all commonplace and considered mean but not abusive as they are today.
I don't think it's as simple as that. If your grandson is not an Irish Traveller then it's difficult to say it is racist, but the school should definitely address the situation as those calling him it may not be fully aware of the connotations. It is bullying and if it's affecting your grandson the school have to take action.
It's only an opinion but I'd be encouraging the young man to develop a sense of humour and not adopt a cringeworthy PC attitude that will turn him into a joyless wet blanket in years to come. Mumsnet for men or some such nonsense.
Tell him to try dishing some out in return, it used to be the way to defuse tense situations without "intervention".
it was just a question as we were interested how the school would perceive it. No one is especially bothered by it, least of all my grandson,but the liitle sh1t would called him it has tried to smash his wristwatch with a hammer launched a lump of ice at his head causing it to bleed etc,etc... so name calling is the least of the problem.
and yes the school are taking steps..
If he's calling him a pikey because they own a touring caravan then I'd say its verbal abuse. A bit like calling someone wearing a pink shirt a poof - is that homophobic?