Niggardly \NIG-erd-lee\ , adjective;
1. Reluctant to give or spend; stingy; miserly
2. Meanly or ungenerously small or scanty
I saw this word in a post on EtiquetteHell.com (a fantastic site that I love) and thought, "Oh my!" But, despite how this word looks, it has nothing to do with the highly-charged word nigger.
Niggardly is first attested as an adjective in 1561 and comes from the noun niggard. Niggard dates to the mid-14th century as nygart and is of uncertain origin. The suffix suggests that French was involved somewhere along the line, but the root word nig is probably related to a Old Norse hnøggr ("stingy"), which derives from Proto-Germanic *khnauwjaz. There's another possibly related word in Old English, hnewa ("stingy, niggardly") which has since disappeared.
Nigger, on the other hand, dates to 1786 as neger from French nègre, which is borrowed from Spanish negro ("black") from Latin nigrum ("black"). From the very beginning nigger was a nasty word and the 'reclaiming' effort didn't take hold until the Black Power movement of the 1960's. Negro in English pre-dates nigger by a couple centuries (it's first attested in the 1550's) and was the politically correct descriptive term for "member of a black-skinned race of Africa" until it was ousted by black in the 1960's.