I think when it's a "witch/werewolf"-style game, hanging/lynching is literally the action. When it's a different setting, probably best to stick with the setting.
I was just reading through the role list for that game, seeing all the various types of wizards, and suddenly Urist Imiknorris is the grand wizard of the KKK.
Wow, yeah. On one hand, reading that sentence is hilarious. On the other, ridiculing evil people is probably good (see: South Park). On the third... yeah, it's probably best to approach with caution/much forethought.
I saw that lynch was being removed from mafia communities for reasons.
For example Mafiascum changed every instance of lynch to eliminate so you have stupid shit like Elo to describe lylo.
I disagee with this decision.
1. As anon players on a forum, we have no visual or audial cues to discriminate each other. If somebody was being an idiot anyway and using derogatory slurs they'd get banned off the forum for breaking the guidelines.
2. What if my name was David Lynch? Is my name banned?
Yep, I think reasonable people can understand context and nuance, including in humor and in the game context.
OTOH, if there are many people against it on a particular forum, I see it being a decision to more easily moderate: if the topic doesn't come up, you don't have to spend time figuring out whether someone's a racist PoS or not.