If I am asked if the word 'witch' is used in the derogatory sense I would say yes, and no. Many people to this day still see wiccans as something to be either feared or hated because of the religious differences. I am not saying these are bad people, and maybe hate is the wrong word. I mean that they do not agree with wicca. And so, instead of calling us by our proper term of wiccan, which inspires a certain level of more accepting atmosphere, they use the term 'witch'.
Throughout history the term 'witch' has been misused when it should not be. Take the Salem Witch Trials. This was one dark moment in history where people were judged and punished to be witches, more often than not they were put to death as well. And such stories as The Crucible give way to still more negative feelings on witches. Witches have always been portrayed as evil beings who ride broom sticks, own black cats and toads, and are covered in hairy warts. It is a sad image that pops up with the term 'witch'. But, in another light, there are many things that also have begun to make the world a positive one as well. And I believe that starts with, yes I am going there, the Wizard of OZ. There was an evil witch, yes, but there was also the good witch. Then there are other such things like Halloween Town that put good spins on witches too. And witches have become a popular subject for main characters in books.
I think that slowly the world is being swayed to never think of the term of 'witch' as a bad thing these days. One day, I believe it will no longer be thought of with a slightly bad aftertaste either. Witch will move from being the still slightly derogatory thing it is now, to an everyday thing that no one will bother to give two seconds of a thought to. But, in the here and now, it can be used as a derogatory saying. It was far worse hundreds of years ago. Back then, if you were accused of being a witch, chances were you would be run off or dead within the month. All those years ago the saying, 'Thou shalt not suffer a witch to live', was very much to belief. What we as wiccans/witches suffer today is not anything close to how those in the past were treated. So, if I am asked if the word 'witch' is being used in a derogatory sense in this day and age, I would have to answer both yes and no, because it truly is both until the day people stop frowning on wicca altogether. And I don't think that day is too far away.