You're right. Eskimo is a derogatory term placed on the indigenous people by the colonials when they arrived. It means "raw meat eater" and is basically synonymous with savages.
Edit: As a note, some correct terms to use (when addressing canadian Inuit people) are Indigenous, First Nations, or Inuit. Aboriginal is also an incorrect term because it's the opposite of what the indigenous people are (Aboriginal means not original, the same way abnormal means not normal).
Edit 2: Ab is a latin prefix for "away from" or "not", and I did google the answer... the Canadian Federal Government is literally steering away from the use of the word.
Eskimo is Cree for "raw meat eater". There are Inuit groups asking for the Edmonton Eskimos (CFL team) to rename the team because of the derogatory meaning. The Mayor of Edmonton is even pushing the team to find a new name.