One demographic phrase I heard a lot in the 1980s, not so much now, is “Spanish-surnamed people.” This is at variance with the theory that “Latino” or "Hispanic are geographically-based designations. It leaves out persons like Fujimori, Kirchner, Barbieri, Hayek… (coincidentally, Ms. Hayek is Arabic-surnamed).
The Qur’an describes 7th-century Arabian society from an urban point of view, first Meccan and then Medinan. “Arabs,” in Qur’anic terminology, is actually used as an ethnic term in contrast to the urban Arabian people it’s addressing: “Arabs” in the Qur’an are desert nomads, essentially what are known as Bedouins today. They come in for mention as people living away from the Muslim community of Medina such that they haven’t learned much about Islam. They’re described as rather ignorant in that context. Like the Bedouin who, visiting Medina for the first time and unused to living in permanent structures, peed on the floor inside the mosque. (The Muslims were going to beat him up, but Muhammad said let him go because he didn’t know better.) It was not a complimentary term!
However, the Qur’an describes itself as “Arabic,” i.e. expressed in plain Arabic language. Because even though the desert nomads were considered ignorant in terms of religion, they were also regarded as the authoritative speakers of the Arabic language (living remote from civilization, their language was the least affected by influence from foreign tongues). When Muhammad (an urbanite) said to his companions, “I am the most Arab of you,” he didn’t mean ethnicity. He meant he spoke the best Bedouin-style Arabic, because he’d been foster-raised in a desert tribe and learned to speak more eloquently like a country boy instead of a city boy.
So the social/geographical definition of Arab as desert nomad and the linguistic definition of Arab as speaker of Arabic were always in contrast. The former sense became obsolete after Muhammad’s time and the latter took over. In other words, at a time when the Qur’an’s message was confined to the Arabian peninsula only, “Arab” was used to contrast civilized urbanites from uncivilized Bedouins. Once Islam had expanded to other lands, all Arabic speakers were thenceforth known as Arabs. During the Umayyad caliphate, major ethnic tension arose between ethnic Arabians and other ethnic groups in the Fertile Crescent, tensions leading to conflict that overthrew the Umayyads. “Arab” had started to be used in its modern definition.
It’s a usage dependent on concentric circles of context, like “Yankee” as an exonym in the world as a whole (Americans contrasted with non-Americans), versus “Yankee” as a more restricted term within the US (Northerners contrasted with Southerners, etc.), as Markxxx noted—except that here in the US, nobody calls anyone “Yank.” “Yank” is strictly an exonym used by non-Americans. In the US, the regional-identity term is “Yankee” only. Except for the New York “Yanks,” which a sports team’s nickname rather than an ethnonym.