Your assumption as to the origin of the Human-Cherokee myth might be correct. However, in my reading about the history of states I'm researching and the census, I have read that early census takers didn't distinguish between black/white mixed races, Indian/white mixed races, oriental/white mixed races, or any other mixed races. The early census forms didn't have a separate column for Indians like the later census forms. So some Indian/white mixed race people have been labeled as mulatto.
I, too, always thought mulatto was a mixture of the African American and white races. However, recently I read an article in a genealogy newletter and I can't remember which one it was from since I get several. I didn't keep the article so I can't quote the source. The person writing this aritcle stated what I have told in the above paragraph about mulatto not necessarily being a person of black/white heritage.
I think the descendents of anyone who has an ancestor listed as a mulatto should dig further before they assume their ancestor is of a black/white mixture.
The person stated in the article that indeed some people of Indian/white mixture were listed on early census as mulatto. Some of these people were on Indian rolls so it could be proven that they were of Indian descent.
I remembered this part of the article very well since I was so surprised by it.
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