According to Webster’s dictionary, the word “Midget” was first used in 1816. It was used to describe anything that was unusually small. This also applied to people who were significantly shorter than average. These people typically had medical conditions known as dwarfism, but more often than not the word was used to describe those dwarfs who were “proportionate” meaning everything about them was small, verses a disproportionate dwarf who would have a typical size body with shorter than normal arms and legs.
Soon, the term was linked not only to dwarfs but specifically to dwarfs who put themselves on display for the circus or other events for entertainment. In these events, the dwarf participants would engage in behavior meant for people to laugh at them and their small size. This is why the word is so offensive today.