Tam pointed out the non-humans in several role playing games were the living embodiment of the planet of hats trope.
Ayup.
It's been a problem in my gaming before. The hats are comfortable for the players. Warm too.
I nationalized the cultures and languages in one fantasy world. The players actively rebelled. They wanted their character to speak "elvish". There were two elf dominated nations, but everyone from those nations spoke their respective languages...
That world did not end racism, notice the racially domination thing? One of the Orc nations was racist-egalitarian. Since being Orc was the pinnacle, the only thing that could beat an Orc was another Orc. Hilarity ensued when FuzzyGeff made a racially elvish, culturally orcish character (not really orcish but the nationish, but I can't remember the national names). Calling him an elf was fighting words!
The players hated it.
They hated the idea that an Aslan, born and raised in the Third Imperium, would not have most of the "racial" characteristics associated with being Aslan. That most of the racial tendencies of the race were cultural really bothered the players. Luckily, in this case, there are enclaves of Aslan who are still culturally of their Heirate clan. They are second class citizens in the Imperium and it became comedic when the same player who complained attempted to get out of playing those traits when they were disadvantageous.
SIGH.
At the other end of the spectrum is the players being Americans when attempting the bog-standard fantasy world. Yes, an American will wonder why we're committing what amounts to genocide on the Orcs. A human from Xanadar is not going to doubt the righteousness of the cause or even a second.
By far my biggest mind-fuck of the players was in a alt-history set in Zaire. One player, thinking he was clever, made his character African-American. To be presented with the locals hating him for the American part and ignoring his skin color really upset him. He complained, "but my character's BLACK!" And they know that, Dave (not his real name). They also know you're an American and they hate Americans; almost as much as Belgians here.
You can't win for losing as a gamemaster.