"Retard" is just as offensive in the U.S. as it would be in the U.K. and the same kind of people who use terms like that there do so here; ignorant, uneducated, unempathetic, uncaring individuals who prefer to belittle something than take the time or energy to understand it.
As for words, most indigineous peoples throughout the world who don't have a written language believe that words hold great power. Words can heal and words can harm. Those who do not choose and use their words clearly and carefully do not think clearly or carefully.
Words and language in general help us to classify and categorize our experience. They allow us to take in information and then put it into usable boxes that we can then take action on.
And yet, words and language are our biggest barriers to a full experience. When we classify something; when we "call" it something, label it, give it a "name" we lessen it in so many ways. A candle flame is not a "candle flame". It IS its own experience - it is heat and light and movement and consuming and growth and destruction and reorganization and so many things that our limiting words cannot encompass, that when we "name" it, we reduce its impact on our experience.
Such is the paradox of language and words to the Human condition.