Often, it's used by defenders of racism, sexism, homophobia, transphobia, and other -isms to justify an oppressive status quo, and it's usually combined with words like "agenda" and "hypersensitive." Those who use it often do so to imply that someone rendering a critique is getting worked up over something that is so trivial it's not worth seriously discussing.
A couple weeks ago, a woman wrote an article about the movie The Hobbit, noting that very few female characters are in it (much like Tolkien's entire Lord of the Ring series), saying:
"I did not read The Hobbit or the Lord of the Rings trilogy as a child, and I have always felt a bit alienated from the fandom surrounding them. Now I think I know why: Tolkien seems to have wiped women off the face of Middle-earth."
Now, I've actually read them all and felt a similar sense of alienation. So, no need to "inform" me about the female characters who do exist, thanks!
Tolkien's fictional world always seemed to me to be not only largely devoid of women, but also inhabited by men who don't even notice, much less care, about the absence of women. With few exceptions, it's a gender traditionalist's wet dream of male homosociality where men do all the stuff that's worth noting and the women do.... well.... whatever it is that women do.
So, it was with much amusement that the vast majority of comments critical of this woman's criticism, and there were many, were not actual substantive, civil engagements with her thesis, but rather, were condescending, mansplainy, angry, hyper-emotional personal attacks on her and her so-called PC agenda.
The reactions were disproportionately more aggressive than the woman's relatively tepid statement that she always felt alienated from Tolkien's works and I think that speaks to a real sense of privilege and entitlement.
Of course, there were a few token, "As a female, can I just say I'm not offended" head-pat seekers in the crowd, but many of the male commenters seemed to really be operating with that sense of self-centered illusory superiority that makes them think that just because they personally see nothing wrong with a work then no one else can ever be reasonably justified in feeling alienated or offended by it. Because of course, they as men are the neutral arbiters of all that is funny, smart, offensive, alienating, and entertaining!
To me, these strongly negative reactions to this woman's critique really speak to how the term "politically correct" is a massive use of projection. The truth is not that people who think critically about how entertainment reinforces stereotypes and oppressions just go around getting all offended at stuff without even thinking about it, reacting solely on how our self-centered, solipsistic emotions react. The truth is that that's exactly what uncritical fanboy fonts of unexamined privilege do whenever they're told their favorite things might be alienating or offensive to other people.