"Dixie" is a minstrel song. Minstrel shows featured caucasians disguised as Africans capering around the stage, singing some of the finest music ever written, with lyrics that, often, demeaned African Americans. Here in Pittsburgh, we have a statue of Stephen Collins Foster standing next to either Old Black Joe, or Old Uncle Ned, depending on who you ask. Either way it isn't the best portayal of African Americans.
Minstrel songs were called "Plantation Melodies". They frequently portrayed slave life as pleasant, and carefree. They used terms like "darkie" and the infamous n-word.
They also had catchy tunes. "Buffalo Gals" was also a minstrel tune, and so was "Bill Bailey", a favorite of mine, because my first boyfriend was named Bill Bailey. (Not William, Bill! I don't know what his parents were thinking.) Having written all this, I will almost certainly spend the next several days humming "Buffalo Gals", or "Rose of Alabama", or Dixie. The tunes are catchy. What can I say.