"Hispanic" technically refers to anything associated with Spain and ancient Spain in particular. In this sense, the term originated in the late sixteenth century, when the Latin words "Hispania" and "Hispanus" were applied to the Iberian Peninsula (Spain and Portugal) and a native of this region respectively.
The term has a broader usage in the United States, where it entered official usage as an ethnic category in 1978. In this sense, the word is applied to anyone with origins in Mexico, Puerto Rico, Cuba, Central and South American countries or any other culturally Spanish nation.
It is used to distinguish these people in the United States from the other racial and ethnic categories of White, Black, Asian (or Pacific Islander) and American Indian (or Alaskan Native).