The earliest known inhabitants of a region can variously be called native, indigenous, or aboriginal peoples. Of these terms, native and aboriginal stand out as having acquired certain stereotypical connotations that render them offensive to many people. The images they tend to evoke (such staples as grass huts, throbbing drums, and warriors brandishing spears) derive in large part from the experience of early European colonists in Africa, Asia, and the Americas, with further elaboration in the books and movies of popular culture. Of course the stereotyping of unfamiliar peoples out of ignorance and cultural arrogance is by no means limited to Europeans, but that fact is of little help in deciding how to refer to indigenous peoples in Modern English.
1
As is often the case with words that name peoples, the use of the noun is considerably more problematic than the use of the adjective. Thus the aboriginal inhabitants of the South Pacific and the peoples native to northern Europe are much more acceptable wordings than if you were to substitute the nouns aborigines or natives. Interestingly enough, the adjective native has recently lost most of its stigma and even gained positive connotations when attached to a geographical noun, as in Native Alaskan or native Australian. This locution has the further benefit of being equally acceptable as either adjective or noun—a member of a native Australian people can just as acceptably and less wordily be called a native Australian. Of terms formed on this model, those referring to indigenous American peoples generally capitalize the adjective—as in Native American, Native Alaskan, and Native Hawaiian—while others are almost always lowercase.
2
As usual, you should use a specific ethnic name wherever possible in lieu of a broader or vaguer categorization—a Cherokee instead of a Native American, a Yupik instead of a Native Alaskan—unless your intention is to emphasize membership in the larger group.
