I brought up this ditty as a start of a thread on misheard words, or as I now know, Mondegreens, awhile back. As well as mishearing the words, I also think I had no understanding of the meaning until just now. I may still be wrong, but here is my take on what my Scottish grandmother was singing to me, with the following:

Wee Mcgregor
He's like a negger
His nose is painted red, white and blue,
He wears a tammy
To please his mammy
So what do you think of we McGregor noo?

This is a song about the repression and the abuse of the Scots by the English., hence the reference to Blacks The British owns the Scots a*s, hence the reference to painting his nose red white and blue. Was there a historic McGregor who collaborated with the British? And did he hide his collaboration under a false guise of patriotism? I'd be interested to hear from someone with some knowledge of the history behind this. Then again I could be totally off the rails regarding my take. I often am.