[falcolas]

If you could replace the fantasy race with a real-world race and not have to change any other thing, it's probably never going to be received well by modern society.

With one notable exception: if it's merely the starting point of a campaign to enact major change (perhaps also if used as a vehicle to display how bad the system really is).

[Brigand]

You could replace the orcs in lotr with the germans, and their leader as sauron. Does that make lotr racist? I don’t think so.

[falcolas]

Do a quick google search for LOTR and racism, and you'll find for yourself that the line isn't quite so clear.

That said, I"m fairly sure you'd have to change a number of things to make "goblins/orcs" match up with real world Germans (such as the cannibalism) But it's been some years since I read LOTR.