Les, "nigger" didn't carry the same offensive overtones (in the UK at least) that it does today. I find it unsurprising that people going out blacked-up might refer to it as "niggering" without necessarily implying that they were pretending to be black people.

Of course it could also derive from minstrelsy - we don't really know. I don't doubt that "traditional" blacking-up and minstrelsy became confused and intermingled. I do question whether minstrelsy was the origin of blacking-up in morris and other English customs. As I explained, the fact that it only appears in some customs and not others (despite other aspects of minstrelsy appearing) suggests to me that these already had a practice of blacking up before minstrelsy came along.

The question whether or not morris sides today should black up is a different matter and a complex one. The origin of the custom is just one consideration, and perhaps not the most important.