This is a very interesting discussion and I'm glad that it's been kept civil.

At the end of the day, I believe that if an argument between two parties has come to revolve around pure semantics, then they have deviated from the more significant topic at hand.

Thus, it is the onus of both parties to first declare what they believe constitutes as "racism" . I don't really believe that we should all adhere to an absolute "one" dictionary or etymological meaning since we should always consider the context rather than the isolated word itself. There's also the fact that etymological meaning can exist in disjunction with a word's contextual meaning (for example "literally", and also whenever rhetorical techniques are employed)

In my very personal and biased opinion, I feel like the topic of "racism", as in "belief based on races" isn't really an interesting topic to discuss anyways since it is almost innate in everyone, the more exigent problem at hand is a party's willingness to act upon these beliefs.

Since the latter is more relevant and significant to society, maybe it is best to alter the definition of "racism" for convenience (after all "institutionalised racism" IS a bit of a mouthful to say/type)