In 1906, British Prime Minister Winston Churchill was campaigning for Parliament. One of his biggest talking points during the campaign was how the previous government brought in 60,000 Chinese citizens as indentured servants. These citizens were used for British labor, and many felt this was exploitation. Churchill sided with the people who saw this as all-out slavery, and he denounced the policy.
After Churchill was elected, he realized he needed to backtrack on his previous remarks. He didn’t want to put the British Crown at fault by saying it supported slavery, but he also didn’t want to seem like a liar. In his change of heart, he refused to say it was a lie that Chinese indentured servants were actually slaves. Instead, he made a speech where he called it a “terminological inexactitude.” It was PR gold.
This soft term has been recycled over the years. Former US Secretary of State Alexander Haig also conveniently made use of it. He defended himself at one point by stating, “That’s not a lie. It’s a terminological inexactitude.” -- http://listverse.com/